Over the next five years, home prices are expected to appreciate by 3.22% per year on average. According to Pulsenomics’ most recent Home Price Expectation Survey, home prices will grow by a total of 17.3%.
What could this mean for a homeowner's equity position?
Just as an example: if we assume a young couple purchased a $250,000 home in January, how much equity will they earn over the next 5 years?
Experts predict that home prices will go up by 4.4% just in this year; thus, the homeowners in our example will have gained $11,000 in equity in just one year.
After five years, their equity will increase by almost $43,000! This figure doesn't even take their monthly principal mortgage payments into account. In many cases, home equity is one of the largest portions of a family’s overall net worth. Homeownership enables you and your family to build equity you can borrow against in the future.