Why Buying a Home Now Could Be Your Best Long-Term Investment

Why Buying Now May Be Worth It in the Long Run

Should you buy a home now, or should you wait? This is a question many potential buyers are asking, given the current state of the housing market. While your personal situation and financial readiness are key considerations, one factor you shouldn’t overlook is how homeownership can help you build equity over time.

Building Equity Over Time

When you buy a home, you start gaining equity immediately, and you may be surprised by how quickly that can accumulate—even in a market where price appreciation is more moderate. The key takeaway here is that owning a home allows you to benefit from long-term value growth, which can be a significant financial advantage in the future.

Fannie Mae’s Home Price Expectations Survey (HPES) gathers insights from over 100 economists, real estate professionals, and market analysts. According to their latest forecast, home prices are expected to continue rising at least through 2028. Although home prices will vary depending on the local market, the overall trend points toward consistent, if moderate, price appreciation.

Here’s why that matters: even if prices rise slowly, you’ll still be building wealth. The longer you wait to buy, the longer you delay this potential growth in equity.

Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts project prices will continue to rise nationally through at least 2028 (see the graph below):

The Financial Benefits of Rising Home Prices

Rising home prices may not sound like good news if you're looking to buy, but once you own a home, this price appreciation works in your favor. Let’s break down how equity can build over time:

If you buy a $450,000 home today and apply the expert projections from HPES, you could gain over $90,000 in equity over the next five years. That’s a substantial increase in household wealth, and it highlights how homeownership can be a long-term investment.

While the housing market can be unpredictable, one constant has been the overall trend of rising home values. Even during periods of slower appreciation, homeowners tend to see steady increases in their equity. This can be a compelling reason to act sooner rather than later, especially if you’re financially ready to make a purchase.

And while rising home prices may not sound great right now, once you own a home, that growth will be a big bonus for you. Here’s a look at what you stand to gain equity-wise once you buy. The graph below uses a typical home’s value and those HPES projections to show how much equity is at stake:

What About Mortgage Rates?

Mortgage rates are another critical factor in the decision to buy. While rates may fluctuate, they’ve recently declined, making this a potentially favorable time to lock in a lower rate. A lower mortgage rate not only reduces your monthly payment but also increases the affordability of your home purchase over the life of your loan.

Keep in mind that mortgage rates are influenced by a variety of economic factors and can change quickly. If you're serious about buying, it’s important to stay informed about current rates and act when the timing is right. By securing a lower rate now, you can increase the financial benefits of homeownership over time.

Consult a Real Estate Professional

Navigating the housing market can feel overwhelming, especially in uncertain times. That’s why working with a trusted real estate professional is crucial. They can provide localized insights into your market, including specific price trends and factors influencing home values in your area.

The Mortgage Reports emphasizes the importance of professional guidance in today’s market:

"Given the intricacies of the current market, it’s more important than ever to stay informed and up to date about housing market conditions. Whether you’re looking to buy or sell in the remaining months of 2024, having a professional guide you through the process can make all the difference."

A real estate professional can offer more than just advice on prices—they can help you understand factors like mortgage rates, local inventory, and future market trends. Their goal isn’t to pressure you into buying but to ensure you have all the information necessary to make an informed decision.

Is Now the Right Time for You?

Ultimately, the decision to buy now or wait depends on your individual circumstances. Consider your financial readiness, how long you plan to stay in the home, and what the market looks like in your area. If growing your wealth through homeownership is one of your goals, then buying sooner may help you take advantage of rising home prices and the potential for long-term equity gains.

While it’s true that waiting could give you time to save more or potentially find a better deal, the cost of waiting could be significant if prices and mortgage rates increase. Buying a home is a personal decision, but it’s essential to weigh all factors, including how quickly you could start building equity.

Bottom Line

Whether you decide to buy now or wait, having an expert in your corner can make the decision easier. A knowledgeable real estate professional will provide you with the insights you need to understand the current market conditions and how they relate to your personal goals. They can help you navigate the complexities of the market, ensuring you’re informed about both the potential risks and rewards of buying a home today.

If you’re ready to explore your options or just want to discuss what makes sense for your situation, let’s connect. With the right guidance, you can make the most informed decision for your financial future.