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Real Estate Still Holds the Title of Best Long-Term Investment

With all the headlines circulating about home prices and mortgage rates, you may be asking yourself if it still makes sense to buy a home right now, or if it’s better to keep renting. Here’s some information that could help put your mind at ease by showing that investing in a home is still a powerful decision.

According to the experts at Gallup, real estate has been crowned the top long-term investment for a whopping 12 years in a row. It has consistently beat out other investment types like gold, stocks, and bonds. Just take a look at the graph below – it speaks volumes:No Caption Received

But why does real estate continue to reign supreme as a top-notch long-term investment? It’s because, even today, buying a home can be your golden ticket to building wealth over time.

Unlike other investments that can feel a bit like riding a rollercoaster with all the ups and downs and ongoing risk factors, real estate follows a more predictable and positive pattern.

History shows home values usually rise. And while prices may vary by market, that means as time goes by, your house is likely to appreciate in value. And that helps you grow your net worth in a big way. As an article from Realtor.com explains:

“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month, owning a home allows you to build home equity. And over time, equity can turn your mortgage debt into a sizeable asset.”

So, if you’re on the fence about whether to rent or buy, remember that real estate was consistently voted the best long-term investment for a reason. And if you want to get in on that action, it may make sense to go ahead and buy (if you’re ready and able).

Bottom Line

When it comes to building wealth that stands the test of time, real estate is the name of the game. If you’re ready to start on your own journey toward homeownership, connect with a local real estate advisor today.

Housing Market Forecast for the 2nd Half of 2024 [INFOGRAPHIC]

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Some Highlights

Focus on Time in the Market, Not Timing the Market

Should you buy a home now or should you wait? That’s a big question on many people’s minds today. And while what timing is right for you will depend on a lot of other personal factors, here’s something you may not have considered.

If you’re able to buy at today’s rates and prices, it may be better to focus on time in the market, rather than timing the market.

The Downside of Trying To Time the Market 

Trying to time the market isn’t a good strategy because things can change. Here’s an example. For the better part of this year, projections have said mortgage rates will come down. And while experts agree that’s still what’s ahead, shifts in various market and economic factors have pushed back the timing of when that’ll happen. Here’s how that’s impacted homebuyers who’ve been sitting on the sidelines. As U.S. News says:

“Those who put off buying a home during the past few years as they were holding out for lower mortgage rates have been left out of the market . . . mortgage rates have stayed higher for longer than previously expected, keeping monthly housing payments elevated. In other words, affordability didn’t improve for those who chose to wait.”

This is why timing the market may not pay off if you’re ready and able to buy now.

The Proof Is in the Pudding: How Homeowners Benefit from Rising Home Prices

Delaying your plans also means missing out on the equity you’d gain if you went ahead with your purchase today. And the potential equity gains that are at stake may surprise you.

Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts are projecting home prices will continue to rise through at least 2028 (see the graph below): No Caption Received

To give these numbers context, let’s take a look at a breakdown of what you stand to gain once you buy. The graph below uses a typical home’s value to show how a home could appreciate over the next few years using those HPES projections: No Caption Received

In this example, let’s say you went ahead and bought a $400,000 home at the beginning of this year. Based on the expert forecasts from the HPES, you could gain more than $83,000 in household wealth over the next five years. That’s not a small number.

This data helps paint the picture of why time in the market really matters.

The Advice You Need To Hear If You’re Ready and Able To Buy Now

Right now, you may be focused on what’s happening with mortgage rates and how those impact your monthly payment, but don’t forget to factor in home prices.

Prices are expected to continue climbing, just at a more moderate pace. And while a moderate rise in prices may not be fun for you now, once you own a home, that growth will be a huge perk. That’s the time in the market piece.

Sure, you could try timing the market, but the equity you’ll be missing out on in the meantime is something to seriously consider. If you’re ready and able to buy now, you have to decide: is it really worth waiting?

Rather than focusing on timing the market. It’s better to have time in the market.

As U.S. News Real Estate sums up:

“There’s never a one-size-fits-all answer to whether now is the right time to buy a home. . . . There’s also no way to predict precisely what the market will do in the near future . . . Perfectly timing the market shouldn’t be the goal. This decision should be determined by your personal needs, financial means and the time you have to find the right home.” 

Bottom Line

If you’re debating whether to buy now or wait, remember it’s time in the market, not timing the market. And if you want to get the ball rolling and set yourself up for those big equity gains, connect with an agent to make it happen. 

Housing Market Forecast: What’s Ahead for the 2nd Half of 2024

As we move into the second half of 2024, here’s what experts say you should expect for home prices, mortgage rates, and home sales.

Home Prices Are Expected To Climb Moderately

Home prices are forecasted to rise at a more normal pace. The graph below shows the latest forecasts from seven of the most trusted sources in the industry:

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The reason for continued appreciation? The supply of homes for sale. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:

“One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory.”

While inventory is up compared to the last couple of years, it’s still low overall. And because there still aren’t enough homes to go around, that’ll keep upward pressure on prices.

If you’re thinking of buying, the good news is you won’t have to deal with prices skyrocketing like they did during the pandemic. Just remember, prices aren’t expected to drop. They’ll continue climbing, just at a slower pace.

So, getting into the market sooner rather than later could still save you money in the long run. Plus, you can feel confident experts say your home will grow in value after you buy it.

Mortgage Rates Are Forecast To Come Down Slightly

One of the best pieces of news for both buyers and sellers is that mortgage rates are expected to come down a bit, according to Fannie Mae, the Mortgage Bankers Association (MBA), and NAR (see chart below):

No Caption ReceivedWhen you buy, even a small drop in mortgage rates can make a big difference in your monthly payments. For sellers, lower rates will bring more buyers back into the market, which can help you sell faster and potentially at a higher price. Plus, it may help you get off the fence, if you’ve been hesitant to sell due to today’s rates.

Home Sales Are Projected To Hold Steady

For 2024, the number of home sales will be about the same as last year and may even rise slightly. The graph below compares the 2024 home sales forecasts from Fannie Mae, MBA, and NAR to the 4.8 million homes that sold last year:

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The average of the three forecasts is about 5 million sales in 2024 – a small increase from 2023. Lawrence Yun, Chief Economist at NAR, explains why:

“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”

With more inventory available and mortgage rates expected to go down, a few more homes are expected to be sold this year compared to last year. This means more people will be able to move. Let’s work together to make sure you’re one of them.

Bottom Line

If you have any questions or need help navigating the market, reach out to a local real estate agent.

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