The value of homes across the country is increasing. This has caused fear to surface in many who were affected by the housing crash of 2008. However, industry leaders say that the market today is completely different from that of 2008. In fact, experts like Odeta Kushi, Deputy Chief Economist at First American, suggest that price appreciation will slow from the double-digit levels that have been seen over the past two years.
Fortunately, economists also believe that home values will not drop dramatically in the coming years.
Pulsenomics recently released a survey of a national panel of 100 economists, real estate experts, and investment and market strategists. In it, the participants forecast that home prices will continue appreciating for the next five years.
These are the expected year-over-year rates of home value appreciation based on the average of all of the panels’ projections:
- 2022: 9%
- 2023: 4.74%
- 2024: 3.67%
- 2025: 3.41%
- 2026: 3.57%
As you can see, home appreciation is expected to remain high over the course of 2022, but gradually return to normal levels over the course of the next few years.
What Does This Mean For You?
Navigating the real estate market can be challenging for buyers. This is especially true when there is a limited supply of homes available for sale and mortgage rates are increasing. Still, buying a home soon does have major benefits.
If you wait to purchase a home, you’ll be likely to pay more than you would this year. Buying now would allow you to leverage future price increases to potentially make a profit. As your home’s value goes up, so does your household’s wealth through equity. That equity can be used to your family’s benefit, making home ownership a great resource for growing families.
Imagine you purchased a $360,000 home in January of this year. If you hold onto that home for five years, you can expect to accumulate up to $96,000 in additional wealth. As the home appreciates, you’ll be better positioned to either sell or even refinance as necessary.
Don’t Let Appreciation Frighten You
Appreciation is a normal part of the market. Therefore, it doesn’t make sense to worry about another massive crash occurring. If you’re ready to buy, now is a great time to do so because experts say prices should continue to climb for the next few years. If you want to get started with the process, let’s talk today!