Emily Merkley, chief executive officer, Cache Valley Association of Realtors
Indeed, there truly is no place like home, and recent data reinforces that housing is one of the biggest positive drivers of wealth creation at every income level. In fact, quantifying the wealth-building power of homeownership shows that home is not only where your heart is, but also where your wealth is.
You need a place to live, and you want your net worth to be more down the road than you are today. Both goals can be achieved by purchasing a home, as experts believe home prices will continue to appreciate over the next several years.
The most recent Home Price Expectation Survey*, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home appreciation to increase as follows:
Using their annual projections, we can see the equity build-up a purchaser could earn, using a $350,000 home purchased in January 2021 as an example:
January 2022………. $371,000
January 2023………. $387,695
January 2024………. $403,203
January 2025………. $417,718
January 2026………. $432,338
A homeowner could increase their net worth by over $80,000* in just five years. That is an average of $16,000 annually. In addition, your mortgage acts as a forced savings account. Every month you pay your mortgage means a portion of your principal balance is paid down. This forced savings adds to the equity you build through appreciation. Homeownership provides you the financial security to make a major investment and then watch it grow over time.
Homeowners are going to make a substantial amount of money in home equity over the next five years– 40x** more household wealth compared to that of a renter. If you’re ready to buy a home, seek the assistance of a local REALTOR®. A REALTOR® can help you determine your cost range for a home, map out your financial possibilities and parameters, find a home that fits your needs, and help you find the best mortgage options to make homeownership your reality this year.
*Home Price Expectations Survey, Polsenomics
**2019 Survey of Consumer Finances, Federal Reserve