If you have been waiting for the “perfect time” to buy a home, you may want to reconsider. Experts forecast that home prices will continue to rise through at least 2029. This means that delaying your home purchase could result in missing out on thousands of dollars in potential equity and paying even more for a home in the future.
How Buying Now Can Help You Build Wealth
Homeownership is one of the most effective ways to build long-term financial security. When you purchase a home, you build equity in two key ways:
1. Home Prices Increase Over Time
As home values rise, the difference between what you owe and what your home is worth—your equity—continues to grow. If you purchase a $400,000 home today, projections suggest that in five years, it could be worth around $483,000. That is an estimated $83,000 in gained equity simply from market appreciation.
2. Mortgage Payments Reduce Your Loan Balance
Each mortgage payment you make reduces the amount you owe on your home. Over time, your balance decreases while your home’s value continues to grow, further increasing your net worth.
This combination of home appreciation and loan paydown allows homeowners to build significant equity over time, something renters do not benefit from.
What Happens If You Wait?
Many potential buyers are hesitant to enter the market, often hoping for lower prices or interest rates. However, waiting to buy can have serious financial consequences, including:
- Higher Home Prices: As demand continues, prices are expected to rise. A home that costs $400,000 today may be significantly more expensive in the future.
- Potentially Higher Interest Rates: While interest rates fluctuate, there is no guarantee that they will drop. Even a small rate increase can raise monthly mortgage payments and increase the overall cost of a loan.
- Lost Equity Growth: If you wait, the home you could have purchased will appreciate in value, but you will not be the one benefiting from it. Instead, you will continue renting or paying more for a home later, missing out on the financial benefits of homeownership.
The Bottom Line
The best time to buy a home is when you are financially ready. With home values expected to continue increasing, delaying your purchase could mean losing out on tens of thousands of dollars in potential equity.
If you are considering buying a home, now is the time to take action. Reach out today to discuss your options and start building wealth through homeownership.
Contact me today to get started.