If you are in the market to buy a home soon, one thing to consider is what experts project home prices will do in the future and how that might affect affordability and your investment. While you may have seen some negative headlines over the past year about home prices, they’re doing much better than expected and are in fact rising across the country. The data shows that experts predict home prices will keep appreciating.
A recent survey, the Home Price Expectation Survey (HPES) which polls over 100 economists, investment strategists and housing market analysis, showed projections from the panelists over the next 5 years through 2027. Estimated increases as forecasted in Q3 of 2023 from December to December are as follows. The year 2023 at 3.32%, 2024 at 2.17%, 2025 at 3.24%, 2026 at 3.79% and 2027 at 4.18%. So if you are one who has been worried that prices would fall based on some headlines you have read, here’s the bottom line. Even though prices can and do vary in each market, experts predict prices will continue to rise over the next handful of years but also at a more normal appreciation rate.
Despite the projected increase of real estate prices in 2024 not being as great as say 2023 or 2025, the result is cumulative and that is how you will grow equity. For example, if you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the course of the next five years. In the end what this does tell us is that now is still a good time to buy real estate and start building wealth as it can grow substantially in the long run. Contact me today and let’s discuss your plans in your specific market of choice.