If you’re considering whether to buy a home now or wait, you’re not alone. Many people are asking the same question. While your decision depends on several personal factors, one key consideration is the opportunity to build equity as soon as you make a purchase. What may surprise you is how quickly that equity can grow, even if home price appreciation remains moderate.

To better understand this, let's look at expert forecasts for home prices over the next five years. Fannie Mae’s Home Price Expectations Survey (HPES) polls over 100 economists and real estate professionals quarterly to predict future home prices. According to their most recent survey, home prices are expected to continue rising nationally through at least 2028 (see the graph below):

While home prices will vary based on your local market, the overall trend shows consistent growth, even if it's at a more moderate pace year-to-year. This steady appreciation can significantly benefit homeowners, as rising home prices boost the equity in your property.

How Much Equity Could You Gain?

Equity is the difference between what you owe on your mortgage and the current market value of your home. The longer you own your home, the more equity you typically build. Even with modest price increases, that equity can add up quickly. Here’s an example based on HPES projections:

If you bought a $450,000 home at the start of this year, based on forecasted appreciation, you could gain over $90,000 in household wealth through equity over the next five years. Here’s a breakdown of how that equity growth could look over time (see the graph below):

This significant boost in wealth is one reason why buying now, if you're able, could be a smart financial move.

Current Market Conditions

Though mortgage rates have been higher recently, they've also seen some declines. Lower rates combined with rising home prices offer an opportunity to maximize your long-term financial gain. As rates fall and home values rise, your monthly mortgage payment becomes a more valuable investment over time.

But timing the market perfectly is difficult, if not impossible. As Jacob Channel, Senior Economist at LendingTree, advises:

"Timing the market is basically impossible. If you’re always waiting for perfect market conditions, you’re going to be waiting forever. Buy now only if it’s a good idea for you."

The Importance of Professional Guidance

Navigating today’s housing market can be tricky, but having a real estate professional in your corner can make all the difference. They’ll help you understand what’s happening in your local market, how home prices are trending, and what your equity potential could be. As The Mortgage Reports explains:

“Given the intricacies of the current market, it’s more important than ever to stay informed and up to date about housing market conditions. Whether you’re looking to buy or sell in the remaining months of 2024, having a professional guide you through the process can make all the difference.”

Bottom Line

The decision to buy now or wait is a personal one, but understanding the equity you stand to gain by purchasing sooner rather than later can help you make an informed choice. The longer you wait, the more potential equity growth you might miss out on. Working with a trusted real estate agent will help you weigh your options and make the right move based on your financial goals and the current market.

Let’s connect to discuss your options and explore how buying now could impact your financial future!