The rise in mortgage rates and the unsettling economy has some people questioning if they should buy a home this year. It is important to factor the long-term benefits of homeownership into your decision.
Homeowners do not regret buying a home 5, 10, or 20 years ago because home values grow with time. The National Association of Realtors stated, “Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.”
Homeownership Price Appreciation
Home values have increased significantly in recent years, even though home price appreciation has moderated this year.
Home prices grew almost 39.9% in Illinois and an average of 63.5% nationwide over the past 5 years. A home’s value can increase substantially in a short time.
Home prices appreciated 166.7% in Illinois and over 290% nationally over the past 30 years. While home price growth varies by state, homeowners nationwide who bought a house thirty years ago saw their homes almost triple in value over that time.
Even if home price appreciation eases as the market slows down this year, experts say home prices are still expected to appreciate nationally in 2023, and your home should grow in value over the next year even if the pace is slower than it was during the peak market frenzy when prices skyrocketed.
Homeownership vs. Renting
The alternative to buying a home is renting. Home rental prices have been climbing for decades. Why rent with an annual lease increase and no long-term financial benefit when you can buy a home? Homeownership is an investment in your future that could set you up for long-term gains.
Data shows home values typically appreciate over time which will increase your net worth. When you’re ready to buy a forever home, contact a Real Estate Broker at Wenzel Select Properties today at 630.430.4790.