Interest rates are falling and home prices are increasing.
What does this mean for you?
A substantial portion of family wealth comes from the value of home ownership. As the value of a family’s home (an asset) increases, so does their wealth.
Many of the questions currently surrounding the real estate industry focus on home prices and the possibility of prices increasing. The most recent Home Price Expectation Survey (HPES) targets and answers these questions.
Here are the results from the second quarter (April-June) 2019 Survey:
Home values will increase by 4.1% in 2019
The average annual increase will be 3.2% over the next 5 years (2024)
The total increase will be 16.8% by 2023
Even experts representing the most aggressive approach to the survey project a total increase of over 6.7% by 2023.
Using the projections from the HPES, report here is a look at the potential wealth a family could earn over the next five years if they purchased a $250,000 home in January of 2019:
Based on gains in home value, their family wealth could increase by $42,000 over that five-year period. If you don’t yet own a home, now may be the time to purchase. Owning could allow you to ride the increase in equity of a growing asset.
If home ownership is a to-do item for the year 2019, visit us at hfamiami.com/homebuyers for information on our mortgage for first-time home buyers. At the HFA, we offer generous down payment and closing costs options. Information in this blog was derived from KCM.