Facts in Focus | Your Home Is a Powerful Investment

Facts in Focus | Your Home Is a Powerful Investment

  • Kyle Frazier
  • 03/17/24

Going into last year (2023), there was a lot of talk about a possible recession that would cause the housing market to correct. Some salacious media headlines were even forecasting home prices would drop by as much as 10-20%—and that made some buyers feel a bit unsure about buying a home. But, that's not what happened.

Here’s what actually happened: home prices went up more than usual nationwide. Brian D. Luke, Head of Commodities at S&P Dow Jones Indicesexplains:

“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years.”

To put last year’s growth into context, the graph below uses data from Freddie Mac on how home prices have changed each year going back to 1980. The dotted line shows the long-term average for appreciation:

 a graph showing the average of a home appreciationThe big takeaway? Home prices almost always go up.

As an article from Forbes says:

“. . . the U.S. real estate market has a long and reliable history of increasing in value over time.”

In fact, since 1980, the only time home prices dropped was during the housing market crash (shown in red in the graph above). Fortunately, the market today isn’t like it was in 2008. For starters, there aren’t enough available homes to meet buyer demand. On top of that, homeowners have a tremendous amount of equity, so they’re on much stronger footing than they were back then. That means there won’t be a wave of foreclosures causing prices to fall.

The fact that home values went up every single year except those four in red is why owning a home can be one of the best financial moves you can make. As a homeowner, you own something that typically becomes more valuable over time. And as your home’s value appreciates, your net worth grows

So, if you’re financially stable and prepared for the costs and expenses of homeownership, buying a home is a great way to increase your net worth over time. 

Bottom Line

Home prices almost always go up over time. That makes buying a home a smart move, if you’re ready and able. Connect with Imagine Marin so we can talk about your goals and and what’s available (we will also search our networking groups to see what we can uncover off market).

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If you’re looking for a strategic real estate partner for buying or selling, you’ve found your match -- Imagine Marin.