With everything happening right now, it’s understandable if you’re wondering whether buying a home is the right move or if you might regret it later.
Everyday expenses are going up, mortgage rates are higher than you’d like, and with so much uncertainty in the economy, taking on a mortgage can feel like a big decision. But here’s something that might help put things into perspective…
Most people who have already bought a home say they’d make the same decision all over again.
According to a recent survey by NerdWallet, most recent homebuyers are happy with their decision. About 74% are glad they bought their current home, while only 3% say they regret it.
And here’s one big reason so many people feel buying a home was worth it, even in today’s market.
Homeownership Is a Long-Term Play
When you’re thinking about buying a home, it’s easy to get caught up in what’s happening right now. You might wonder about mortgage rates or whether home prices are rising or falling. Those things are important, but don’t let the search for the perfect time to buy distract you from the bigger picture.
Buying a home usually isn’t just a one or two year decision. It’s a long term investment. When you look at the bigger picture, things start to make more sense, especially when you consider how home prices and equity can change over time.
According to the Federal Housing Finance Agency (FHFA), home prices across the country have increased by 33.4% in just the past five years (see map below).
That rise in home prices has helped homeowners build significant wealth. According to Bankrate, homeowners gained an average of nearly $150,000 in wealth over the past five years as home equity increased across 90% of major metro areas.
One of the biggest benefits of owning a home is building equity. As you pay down your mortgage and your home increases in value over time, your share of ownership can grow.
Now, Zoom Out Even Further
The five year numbers are impressive, but the results become even more eye opening when you look at the long term rather than just individual market cycles.
According to FHFA data, home prices nationwide have increased by 336% since 1991. Think about that for a moment. Home prices have more than tripled over the years (see map below).
That doesn’t mean home prices increase every year or that buying a home is the right choice for everyone right now. The key is to buy only when the numbers make sense and the monthly payment fits comfortably within your budget.
What this really shows is that waiting for the perfect time to buy could cause you to miss the bigger picture.
““Your home’s equity is part of your total wealth as a homeowner. If you decide to sell your home, the equity you have built over time will come back to you in the sale. . .
If it’s time to upsize or downsize, you can use that cash for the down payment on your next home.”
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If buying a home fits your budget, it could help you build equity and give you more financial options in the future.
And if you’re worried about home prices dropping after you buy, keep in mind that you’re not buying a home for just one year.
Home prices can drop, and we’ve seen that happen before. But over the long term, they’ve generally gone up. The longer you own your home, the more time you have to weather market changes and build equity.
Bottom Line
Don’t let today’s uncertainty distract you from the long term benefits of homeownership. Most homeowners say they’d make the same decision again, and decades of rising home prices help show why.
If you’re wondering whether buying a home makes sense for you right now, let’s go over the numbers together and see how homeownership could benefit you in the years to come.
