Home Values & Personal Wealth
Over the next five years, home prices are expected to appreciate 3.22% per year on average and increase in value by 17.3% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey. Different areas of the country will appreciate at different rates.
What does this mean for homeowners and their equity position?
To give you an idea, let’s assume a couple purchased and closed on a $250,000 home in January 2017. If we look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?
It is predicted home prices will increase by 4.4% this year alone, meaning the home owners in our example will have gained $11,000 in equity in just one year.
Over a five-year period, their home equity will increase by nearly $43,000! This figure does not even take into account the monthly reduction in their principal balance through their mortgage payment. In many cases, home equity is one of the largest portions of a family’s overall net worth.
Real Estate Bottom Line
Not only is home ownership a source of pride, it also offers families the ability to build equity. You may want to borrow against your equity or make it part of your retirement portfolio. If you are ready and willing to buy, find out if you are able to today – let’s talk!