Have I Missed the Opportunity to Build Family Wealth from Real Estate?

I was having a conversation with a first time home buyer this morning and I was walking him through the loan process when the question was raised, “Am I buying at the top of the market and have we missed the opportunity to create equity in our home purchase?” That’s a great question when you look at the fact that we have had above average appreciation rates in North Texas in the last 18 months.

For that matter today, many real estate conversations center on housing prices and where they may be headed. That is why I like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number. I have to say after paying close attention to these numbers over the last few years they get it pretty close.

Here are the results of their latest survey:
Home values are projected to appreciate by 3.7% over the course of 2016, 3.3% in 2017 and 3.2% in 2018/2019, and finally 3.1% in 2020 (as shown below). That means the average annual appreciation projections are 3.3% over the next 5 years.

What Does This Mean For You?

A home purchased in 2016 for $250,000 has the potential to increase your family wealth as much as $44,000 over the next five years!  I don’t know about you but that sounds a lot like free money to me, and certainly would be a great start for a first time home buyer.  I believe home ownership is still the cornerstone to building family wealth in America.