Many consumers are wondering what will happen with home values over the next few years. Some are concerned that the recent increase in home prices will lead to a situation similar to the housing crash 15 years ago.
Experts say the market is totally different today. Deputy Chief Economist at First American tweeted just last week on this issue. “We do need price appreciation to slow today (it’s just not sustainable over the long run), but high price growth today is supported by fundamentals – short supply, lower rates & demographic demand. We are in a much different & safer space: better credit quality, low debt to income ratios and tons of equity. Hence, a crash in prices is very unlikely.
Price appreciation will slow from the double-digit levels the market has seen over the last two years. However, experts believe home values will not depreciate to where a home would lose value. To this point, experts believe that homes will continue appreciating over the next five years.
What does this mean for you as a buyer? With a limited supply of homes available for sale and both prices and mortgage rates climbing, it can be a challenging market to navigate as a buyer. But buying a home sooner than later does have its benefits. If you wait to buy, you’ll pay more in the future. However, if you buy now, you’ll actualy be in the position to make future prices work for you. Once you buy, those rising home prices will help you build your home’s value and your own household wealth through home equity.
Bottom line: If you’re trying to decide whether to buy now or wait, the key is knowing what’s expected to happen with home prices. Experts say prices will continue to climb in the years ahead, just at a slower pace. So, if you’re ready to buy, doing so now may be your best bet for your wallet. It will also give you a chance to use the future home price appreciation to build your own net worth through rising equity. If you want to get started, contact one of our real estate professionals at 518.452.3912