If you’re considering buying a home, it’s important to evaluate whether it will be a wise investment in the long run. Many people wonder what home prices are likely to do in the future and how that could impact their investment.
While home prices aren’t expected to drop significantly this year, some markets may experience appreciation while others may see a decline in value. It’s essential to consider the long-term view, as experts predict a return to a more consistent rate of price appreciation over the years to come.
According to the latest quarterly Home Price Expectation Survey (HPES) conducted by Pulsenomics, over 100 economists, investment strategists, and housing market analysts believe that home prices will stabilize over the next five years, as shown in the graph below. After a slight depreciation this year, prices are expected to return to normal levels of appreciation by 2027.
The takeaway is that experts don’t expect a significant nationwide drop in home prices, but rather, they anticipate steady price appreciation in the long run. This is why homeownership is a wise investment over time.
When you purchase a home, the appreciation in value raises your home’s worth, contributing to the growth of your household’s wealth. The following graph shows how a typical home’s value could increase over the next few years based on expert price appreciation projections from the HPES.
For instance, if you bought a $400,000 home at the start of this year, taking into account the forecasts from the HPES, you could accrue over $54,000 in household wealth over the next five years. Therefore, if you’re unsure whether purchasing a home is a wise decision, consider its potential to be an effective long-term wealth-building tool.
In conclusion, although there may be a slight depreciation in home prices this year, prices are expected to rise over the next five years. If you’re prepared to buy a home, remember that it can set you up for long-term success, as home values and your own net worth are expected to increase. Reach out to start the homebuying process today.
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