Unbeknownst to many, homeowners increase their family’s overall net worth simply by paying off their monthly mortgage. Unlike like with renting where you merely put your money out for time used, homeowners get a positive kickback from their monthly payments through home equity.
Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).
The latest data from their Q4 2018 Survey revealed that home prices are expected to round out the year 5.8% higher than they were in January. For the next 5 years, home values will appreciate by an average of nearly 3% a year.
This is still great news for homeowners!
For example, let’s assume a young couple purchases and closes on a $250,000 home in January. Simply through their home appreciating in value, those homeowners can build their home equity by nearly $40,000 over the next five years.
Let’s look at the potential equity gained over the same period of time at some higher price points:
In many cases, home equity is a large portion of a family’s overall net worth.
If your plan for 2019 includes entering the housing market to purchase a home, whether it’s your first or your fifth, meet with a local real estate professional who can help you understand where prices are headed in your area.