Exploring the Long-Term Advantages of Homeownership

If you're thinking about purchasing a home in the near future, the possibility of higher mortgage rates, increasing home prices, and ongoing concerns about affordability might lead you to question whether it still makes sense to buy a home right now. While these market factors are crucial, it's important to also consider the long-term benefits of homeownership.

Consider this: If you're acquainted with individuals who purchased a home 5, 10, or even 30 years ago, it's likely you'll struggle to find someone who regrets their choice. What's behind this phenomenon? It's linked to the way property values appreciate over time and how this, in turn, enhances your personal wealth. This could be the reason why, according to a recent survey conducted by Fannie Mae, 76% of respondents expressed confidence in homeownership as a secure investment.

Let's take a look at how home price appreciation alone can add up over the years.

Home Price Growth over Time

The map below uses data from the Federal Housing Finance Agency (FHFA) to show how much home prices have increased in each region of the United States over the last five years. The map is broken down by region to help show larger market trends. In other words, the map shows the average home prices appreciation in each region of the US over the past five years. The map is broken down by region to make it easier to see how home prices have changed in different parts of the country.

Examining the percentage shift in home prices, it becomes evident that, on average, nationwide home prices experienced a growth of slightly more than 57% during a five-year span.

A few regions may slightly surpass or fall short of this average, but on the whole, home prices made substantial progress in a relatively brief period. Moreover, if we extend this timeframe further, the advantages of homeownership and the substantial gains accrued by homeowners over the years become even more apparent (refer to the map below for details).

The second map reveals that, on a nationwide scale, home prices witnessed an average appreciation of more than 297% over approximately three decades.

This national average illustrates that the average homeowner who purchased a house three decades ago witnessed their home's value nearly triple during that period. This is a significant factor contributing to the continued satisfaction of many homeowners who made their purchase years ago.

Despite hearing discussions throughout the year about the possibility of a housing market crash, it has not materialized. In fact, industry experts anticipate that home prices will continue to increase for the foreseeable future.

Bottom Line

If you're questioning whether buying a home still makes sense today, it's essential to highlight the long-term advantages that come with homeownership. When you're prepared to begin your homebuying journey, don't hesitate to reach out to a local real estate professional.