A house is more than just a place to call home; it’s also a means of establishing a stable and potentially lucrative investment.
Despite being a major financial commitment, many Americans continue to view homeownership as a path to accumulating wealth since building equity can help provide financial security and stability. And long-term trends and patterns in the housing market prove this largely true—homes typically appreciate in value over time, even when adjusting for inflation.
However, while buying a house can generally be considered a good investment, the decision to do so is contingent upon several factors, such as location, your current financial circumstances, and the timing. Consider the following factors to determine whether it’s the right time for you and how to get the most out of your purchase.
Appreciation
As the years go by, your home will likely increase exponentially in value. According to a 2023 report by Rocket Homes, property owners who have had their homes for one to three years have already experienced a 16.3 percent increase—and that number jumps to 46.6 percent for homeowners of seven to ten years. There are many things that can influence a home’s appreciation. For instance, a smaller home may have less value itself, but if it’s in a well-kept neighborhood in a great school district, it is much more likely to appreciate quickly than the best home in a rundown neighborhood near a busy highway. This potential for a substantial increase in value underscores the long-term (and even short-term) financial benefits of investing in homeownership, offering a promising path toward building wealth and securing your financial future.
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