We recently got a report called the Home Price Expectation Survey (or HPES for short) showing where residential home prices are headed over the next five years. This is a combination of over a hundred experts think the market is headed. This year they think homes should go up by 4.3% – some think more and others think less so they average together to get 4.3%. Today, we want to show you what the results of the report could mean to you. A good portion of every family’s wealth comes from the equity in the home they live in. As the value of their home (an asset) increases so does their equity. Let’s look at a possible case scenario based on the latest Home Price Expectation Survey. Here is a chart showing the survey’s projections on annual appreciation over the next five years over to the right.
As you see now is the time to buy a home because this year will be the largest projected growth.
We then looked at the five-year impact this would have on the equity of a family that purchased a home in January for $250,000. Their family wealth (based on increased equity) would increase by $47,772 over those five years. That doesn’t count the mortgage you have been paying down. As we saw in our article Looking To Gain Wealth you should increase even more than that with how much you pay down your mortgage too.
If you don’t yet own, now is the time to buy Utah real estate. If you already own, see your home’s value to see if maybe it’s time to move up to enjoy your dream home and also ride the increase in equity of the larger asset – 4.3% is a lot more if you house is $350,000 rather than $250,000.