Unpacking the Long-Term Benefits of Homeownership

<article class="post-811205 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-811205"><span class="entry-date">October 2, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Unpacking the Long-Term Benefits of Homeownership</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Unpacking+the+Long-Term+Benefits+of+Homeownership&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Funpacking-the-long-term-benefits-of-homeownership%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Unpacking the Long-Term Benefits of Homeownership Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20231002-Unpacking-the-long-term-benefits-of-homeownership.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>If you’re thinking about buying a home soon, higher <a href="https://www.simplifyingthemarket.com/2023/09/06/mortgage-rates-past-present-and-possible-future/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">mortgage rates</a>, rising <a href="https://www.simplifyingthemarket.com/2023/09/08/home-price-forecasts-revised-for-2023-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a>, and ongoing affordability concerns may make you wonder if it still makes sense to buy a home right now. While those market factors are important, there’s more to consider. You should think about the long-term benefits of <a href="https://www.simplifyingthemarket.com/2023/09/21/the-many-non-financial-benefits-of-homeownership/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">homeownership</a> too.</p>
<p>Think about this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how home values grow with time and how, by extension, that grows your <a href="https://www.simplifyingthemarket.com/2023/09/01/homeowners-have-a-lot-of-equity-right-now-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">own wealth</a>. That may be why, in a recent <em>Fannie Mae </em><a href="https://www.fanniemae.com/research-and-insights/perspectives/consumers-homeownership-aspirations-remain-high-despite-higher-home-prices-and-interest-rates" rel="noopener noreferrer" target="_blank">survey</a>, 76% of respondents say they believe buying a home is a safe investment.</p>
<p>Here’s a look at how just the home price appreciation piece can really add up over the years.</p>
<h4><strong>Home Price Growth over Time</strong></h4>
<p>The map below uses <a href="https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx" rel="noopener noreferrer" target="_blank">data</a> from the <em>Federal Housing Finance Agency</em> (FHFA) to show just how noteworthy price gains have been over the last five years. And, since <a href="https://www.simplifyingthemarket.com/2023/09/26/the-return-of-normal-seasonality-for-home-price-appreciation/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a> vary by area, the map is broken out regionally to help convey larger market trends:</p>
<p><a href="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-over-5-years.png" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-over-5-years.png"/></a></p>
<p></p>
<p><strong>If you look at the percent change in home prices, you can see home prices grew on average by just over 57% nationwide over a five-year period.</strong></p>
<p>Some regions are slightly above or below that average, but overall, <a href="https://www.simplifyingthemarket.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a> gained solid ground in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer (<em>see map below</em>):</p>
<p><a href="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-since-91.png" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230928/20231002-Percent-Change-in-Home-Prices-since-91.png"/></a></p>
<p><strong>The second map shows, nationwide, home prices appreciated by an average of over 297% over a roughly 30-year span.</strong></p>
<p>This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost triple in value over that time. That’s a key factor in why so many homeowners who bought their homes years ago are still happy with their decision.</p>
<p>And while you may have heard talk throughout the year that <a href="https://www.simplifyingthemarket.com/2023/09/08/home-price-forecasts-revised-for-2023-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a> would crash, it hasn’t happened. In fact, experts <a href="https://www.simplifyingthemarket.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">project</a> home prices will continue to rise for years to come. </p>
<h3>Bottom Line</h3>
<p>If you’re wondering if it still makes sense to buy a home today, it’s important to focus on the long-term advantages that come with homeownership. When you’re ready to start your homebuying journey, reach out to a local real estate professional.</p>
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