Should You Buy a Home This Year?

Should I Buy a Home This Year?

Today’s cooling housing market, the rise in mortgage rates, and mounting economic concerns have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to factor the long-term benefits of homeownership into your decision.

If you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how you gain equity and wealth as home values grow with time. People will tell you that purchasing a home is a long term investment. Home equity is built up through both market price appreciation and by paying down the mortgage. Combing the effects of these two can really add up to quite a sum over the years.

Home Price Growth Over Time

Even though home price appreciation has moderated a bit this year, home values have still increased significantly in recent years. That means a home’s value can increase substantially in a short time. And if you expand that time frame to many years, the benefit of homeownership and the big gains you stand to make become even clearer.

While home price growth varies by state and local area, the nationwide average shows that a typical homeowner who bought a house thirty years ago saw their home almost triple in value over that time. This is why homeowners who bought their homes years ago are still happy with their decision.

Even if home price appreciation eases as the market cools this year, home prices are still expected to appreciate nationally in 2023. That means that in most markets a 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.

The Bottom Line

Of course you can always continue renting, but rental prices have been climbing for years, and recent rent increases have been huge.  So why rent and face annual lease hikes for no long-term financial benefit? Instead, consider buying a home and making an investment in your future that could set you up for long-term gains.