Why You Should Buy a Home This Year

Buy a home or continue renting? Arguing the financial benefits can create a heated debate. However, there is one element in the home buying corner you can’t ignore: equity.

“Owning a home makes you money,” says Christian Peguero, Sales Associate at ERA Justin Realty. “By renting, you’re paying someone else’s mortgage and making them money.”

According to the National Association of Realtors (NAR), homeownership is a key pathway to wealth. Here’s how equity can build your net worth over time when you own a home.

Equity over the Last 10 Years

National Association of Realtors (NAR) research shows homeowners nationwide have gained an average of $139,134 in equity over the past 5 years and $218,505 over the last 10 years. “That built-up equity means you can cash-in on your starter home and upgrade to your dream home,” says Jennifer Darby Metzger, Broker/Owner at ERA Justin Realty, “Usually when people build-up equity, they use it to buy a larger or newer home in a better area. That’s the wealth effect of equity.”

Looking Forward at the Equity to Come

The past two years have seen record leaps in home prices, and they’re still expected to grow even more. The Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, predicts home values will increase as follows:

• 2022: 5.82%
• 2023: 3.94%
• 2024: 3.56%
• 2025: 3.55%

“It takes time to build up equity through price appreciation and paying down your mortgage,” says Christian. “But it ultimately pays off. Your grandchildren may thank you.”

Homeowners who accumulate wealth through equity can pass it on to future generations. The Federal Reserve’s Survey of Consumer Finances explains:

“Families can directly transfer their wealth to the next generation in the form of a bequest. They can also provide the next generation with inter vivos transfers (gifts), for example, providing down payment support to enable a home purchase or a substantial wedding gift.”

To explore your options in real estate, reach out to Christian Peguero or any of the sales associates at ERA Justin Realty by calling 201-939-7500.