If you’re thinking about buying a home, you want to be confident that buying a home is a sound decision for you and your family. And for many people, that means thinking about what home values are projected to do in the coming years and how that could impact your investment.
So far this year, we aren’t seeing home prices fall dramatically. As the year goes on, however, some markets may go up in value while others may lose value. That’s why it’s helpful to keep the long-term view in mind. Experts project a return to a steadier rate of price appreciation in the years that follow.
Home Price Appreciation in the Years Ahead
Over 100 economists, investment strategists, and housing market analysts were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey (HPES). The report indicates what they believe will happen with home prices over the next five years. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.
The big takeaway for anyone thinking of buying a new home is that while experts are forecasting a fall in home prices nationally in 2023, they don’t believe it will be precipitous. And, even though some markets will depreciate others will see home price appreciation. Additionally, when they look further out, they see steady price appreciation in the long run. That’s a great example of why homeownership wins over time.
What Does This Mean for You?
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s a forecast of how a typical home’s value could change over the next few years using the expert price appreciation projections from the survey mentioned above (see graph below):
In this example, if you bought a $400,000 home at the beginning of this year and factor in the forecast from the HPES, you could accumulate over $54,000 in household wealth over the next five years. So, if you’re wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool owning your home is over the long term.
According to the experts, while we may see slight depreciation this year, home prices are expected to grow over the next five years. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) are projected to grow.
At Bay Shores Real Estate we would love the opportunity to help you find the home you’ll love! We are a full-service real estate services firm with a highly personal approach. Our office is in Newport, RI but Bay Shores serves clients throughout Rhode Island and Southeastern Massachusetts. We will help you find the home that’s perfect for you and will be right there with you through the entire buying process!
Let’s connect so I can answer all of your questions about our housing market and, if you’re ready, begin the homebuying process today.