Are you ready to increase your wealth? I know I am. Over the next five years, home prices are expected to appreciate 3.24% per year on average and to grow by 21.4% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.
So, what does this mean for homeowners and their equity position?
As an example, let’s assume a young couple purchases and closes on a $250,000 home in January. If we look at only the projected increase in the price of that home, how much equity will they earn over the next 5 years?
Since the experts predict that home prices will increase by 4.0% this year alone, the young homeowners will have gained over $10,000 in equity in just one year. Holy COW!
Over a five-year period, their equity will increase by over $43,000! Holy FREAKING COW! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.
If you already own a home, you have started on a great path to future wealth, so think about an investment property to help increase stability in your financial future. This is what my husband and I are going to do this year, finally, how can we not? I know it means we may not get to remodel the house this year, but it is the financially smart thing to do. Being financially smart may not fulfill my instant gratification needs, but in five years I will be very happy!
Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future.