Your Home Is a Powerful Investment

<article class="post-969733 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-969733"><span class="entry-date">March 13, 2024</span><div class="entry-header center-block text-center"><h1 class="entry-title">Your Home Is a Powerful Investment</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=Your+Home+Is+a+Powerful+Investment&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fyour-home-is-a-powerful-investment%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="Your Home Is a Powerful Investment Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20240313-Your-Home-Is-a-Powerful-Investment.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>Going into 2023, there was a lot of talk about a possible <a href="https://www.simplifyingthemarket.com/2024/03/05/why-there-wont-be-a-recession-that-tanks-the-housing-market/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">recession</a> that would cause the housing market to crash. Some in the media were even forecasting home prices would drop by as much as 10-20%—and that might have made you feel a bit unsure about <a href="https://www.simplifyingthemarket.com/2024/02/16/achieve-your-dream-of-homeownership-with-condos-and-townhomes-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buying a home</a>.</p>
<p>But here’s what actually happened: <a href="https://www.simplifyingthemarket.com/2024/02/15/dont-let-the-latest-home-price-headlines-confuse-you/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a> went up more than usual. Brian D. Luke, Head of Commodities at <em>S&amp;P Dow Jones Indices</em>, <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20240227-1470765/1470765_cshomeprice-release-0227.pdf" rel="noopener noreferrer" target="_blank">explains</a>:</p>
<blockquote><p><em>“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years.”</em></p></blockquote>
<p>To put last year’s growth into context, the graph below uses <a href="https://www.freddiemac.com/research/indices/house-price-index" rel="noopener noreferrer" target="_blank">data</a> from <em>Freddie Mac</em> on how home prices have changed each year going back to 1980. The dotted line shows the long-term average for appreciation:</p>
<p> <a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240311/20240313-Percent-of-Annual-Home-Appreciation.png" rel="noopener noreferrer" target="_blank"><img alt="a graph showing the average of a home appreciation" decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240311/20240313-Percent-of-Annual-Home-Appreciation.png"/></a></p>
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<h4><strong>The big takeaway?</strong> <strong>Home prices almost always go up. </strong></h4>
<p>As an article from <em>Forbes</em> <a href="https://www.forbes.com/sites/jimwang/2023/06/21/is-buying-a-home-really-a-good-investment/?sh=68dae57a4aab" rel="noopener noreferrer" target="_blank">says</a>:</p>
<blockquote><p><em>“. . . the U.S. real estate market has a long and reliable history of increasing in value over time.”</em></p></blockquote>
<p>In fact, since 1980, the only time home prices dropped was during the housing market crash (<em>shown in red in the graph above</em>). Fortunately, the <a href="https://www.simplifyingthemarket.com/2024/02/29/why-we-arent-headed-for-a-housing-crash/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">market today</a> isn’t like it was in 2008. For starters, there aren’t enough available homes to meet buyer demand right now. On top of that, homeowners have a tremendous amount of <a href="https://www.simplifyingthemarket.com/2024/02/08/home-equity-can-be-a-game-changer-when-you-sell/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">equity</a>, so they’re on much stronger footing than they were back then. That means there won’t be a wave of <a href="https://www.simplifyingthemarket.com/2024/02/02/theres-no-foreclosure-wave-in-sight-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">foreclosures</a> that causes prices to fall.</p>
<p>The fact that home values went up every single year except those four in red is why owning a home can be one of the smartest moves you can make. When you’re a homeowner, you own something that typically becomes more valuable over time. And as your home’s value appreciates, your <a href="https://www.simplifyingthemarket.com/2024/01/11/the-dramatic-impact-of-homeownership-on-net-worth/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">net worth grows</a>. </p>
<p>So, if you’re financially stable and prepared for the costs and expenses of homeownership, buying a home might make a lot of sense for you.</p>
<h3>Bottom Line</h3>
<p>Home prices almost always go up over time. That makes <a href="https://www.simplifyingthemarket.com/2024/02/20/strategic-tips-for-buying-your-first-home/" rel="noopener noreferrer" target="_blank">buying a home</a> a smart move, if you’re ready and able. Connect with a local <a href="https://www.simplifyingthemarket.com/2024/02/28/why-you-want-an-agents-advice-for-your-move/" rel="noopener noreferrer" target="_blank">real estate agent</a> to talk about your goals and what’s available in our area.</p>
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