rising prices are building your family’s wealth


Homes are appreciating, which is what makes buying one such an excellent investment. According to Pulsenomics’ most recent Home Price Expectation Survey, home prices are expected to appreciate, on average, by 3.6% per year over the next 5 years and grow 18.2% cumulatively. What does that mean for homeowners? Equity and more of it.


How This Looks in Numbers

Let’s assume someone purchased a $250,000 home this January. If we look at the projected increase in the price of that home, over 5 years that same property will have increased in price by $48,314.


The experts predict that home prices will already increase by 5.0% in 2018. As shown, the homeowners in question could look forward to gaining $12,500 in equity in their first year of ownership.


What Exactly is Equity?

Equity is the portion of a home that owners actually own. For instance, if someone puts a 20% downpayment on a property and borrows 80% of the price from a lender, they really only own 20% of that home. The other 80% is not owned by the lender, but it is used as collateral for the loan. As the loan gets paid, the home equity goes up. Additionally, when the home appreciates, the amount owed to the lender doesn’t increase but the equity sure does.


How Does This Help Homeowners?

Home equity is an incredible best asset and part of an individual’s net worth. It can be used later in life to buy another home, or even serve as a safety net through home equity loans or reverse mortgages. While the last two can be tricky and even risky, the option is sometimes necessary.


Bottom Line

Homeownership something to be proud of. Not only can it increase the quality of life to have a place of one’s own, it also offers your family the ability to build equity and consequently some reassurance. If you are ready and willing to buy, contact us today for a FREE consultation.