Wealth Creation through Housing
You may have heard the expression “Date the rate, marry the house.” While this strategy is not for everyone, the theory behind it is something to consider.
Historically, purchasing a home and holding it for 10 years has returned a profit every year except one since 1942. A significant increase in home prices was experienced recently through 2022 stabilizing over the past year and a half. Higher mortgage rates and inflationary concerns have tempered the overall market, but appreciation has continued during this time.
CoreLogic reported home prices rising 1.2% in March after rising 0.7% in February which was stronger than their forecast. They have bumped their forecast anticipating home prices to rise 3.7% over the next 12 months (up from 3.1%). Black Knight’s data was similar with a 1.2% rise in March and 5.6% year over year.
The theory is that there may be a cost of waiting. The strategy of wealth creation through housing is about opportunity, not the lowest rate. When rates do drop, more home buyers will enter the market increasing demand and pushing prices up further. Thus, the time to buy is now!
It is important to note that markets vary and must be considered in this equation. Here in the Triangle Region and other North Carolina cities, it seems the trend in appreciation will continue with more people moving to our areas.
