Is Purchasing a Home Currently a Wise Decision?

Considering Buying a Home? Here's What You Should Know

Are you contemplating the idea of purchasing a home? If you are, then you're likely facing the common dilemma: should I make the move now or wait? Ultimately, the decision rests with you, but here's some valuable information to aid in your deliberation.

What Lies Ahead for Home Prices?

Every quarter, Fannie Mae and Pulsenomics release findings from the Home Price Expectations Survey (HPES). This survey gathers insights from over 100 experts encompassing economists, real estate professionals, as well as investment and market strategists, to gauge their predictions regarding home prices.

According to the latest survey, these experts foresee a continuous upward trend in home prices over the next five years (illustrated in the graph below).

[Graph of projected home price increases]

The abundant green bars in this chart signify a consensus among experts: there's no anticipation of price declines. Instead, they predict a steady annual increase of 3-4%.

Even though the rate of growth may taper off slightly in 2025 compared to 2024, it's important to note that these incremental increases can significantly accumulate over time. For instance, if your home's value rises by 3.78% this year, it's expected to appreciate by 3.36% next year, and another 3.87% the following year.

What Does This Imply for You?

The forecasted trajectory of rising prices should instill confidence in your decision to buy a home. Essentially, it indicates that your home is poised to become a valuable asset with appreciating worth in the foreseeable future.

If you're still uncertain, perhaps these figures will sway you. They demonstrate the potential change in value for a typical home over the next few years based on expert projections from the HPES (as shown in the graph below).

[Graph depicting growth in home value]

For instance, suppose you purchased a home for $400,000 earlier this year. According to these projections, you could potentially accrue over $83,000 in household wealth over the next five years as your home's value appreciates.

Naturally, you could opt to wait; however, delaying your home purchase will likely result in higher costs in the long run.

In Conclusion

If you're contemplating the idea of homeownership and find yourself financially prepared, now might be an opportune time to take the plunge. With home prices expected to continue their ascent, your investment stands to appreciate in value. Engaging the services of a local real estate agent can be an invaluable initial step towards embarking on your homeownership journey.

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