Your home is one of the most valuable investments you will ever make. A home that is appropriately cared for over the years can reasonably expect to appreciate over time. With financial experts like Dave Ramsey stating that right now is the best time to buy a house, it is important to identify the current market trends, learn how home appreciation works in real estate, and understand how to recoup the most value from your investment.
All About Home Appreciation
When the value of your home increases over time, it is said to have appreciated. This enables you to sell the house for a profit or borrow money based on the equity in your home. The national average for home appreciation is currently 2% monthly and 14.5% annually. However, there are a number of issues that can impact this rate.
Factors Impacting Appreciation
Most people have concerns about their home values and wonder “will my home lose value?” While depreciation can occur for a number of reasons, most houses appreciate if the owners pay attention to some important factors.
- Location: realtors have long pushed the slogan: “location, location, location.” The area your home is in will impact your appreciation, which may vary based on state, county, city, neighborhood, and type of property.
- Housing market: supply and demand greatly affect appreciation trends. If there is an abundance of homes on the market, prices will fall, which affects appreciation. Many experts say this is the best time to buy a house. If there are more buyers than inventory, home values will increase.
- Interest rates: going hand-in-hand with the housing market, interest rates impact purchasing demand, which affects appreciation. While interest rates are starting to creep up, they are still relatively low, indicating now is the best time to buy a house.
- Home features: when your home is updated and well-maintained, it accumulates more value more quickly. For this reason, new homes are an attractive investment because the purchase price includes the most updated styles and features, setting the stage for strong home appreciation.
What To Consider When Buying New
Investing in a new home carries many advantages, including energy efficiency, new appliances, updated architectural features, and no need for upgrades, repairs, or replacements for a while. Here are some issues to consider when building a new home to maximize your property’s appreciation.
- Buying a home in a growing community spurs appreciation as the nearby property values increase.
- The value of land generally appreciates, so it’s a smart move to buy a homesite early in the construction phase.
- Avoid building a home in a neighborhood filled with houses for rent or lease, which can negatively impact your home’s value.
Why Buy Now?
2021 brought record home sales and prospective buyers were faced with bidding wars, resulting in many people waiting to buy. 2022 is the best time to buy a house, particularly a new home. With the supply/demand equation beginning to balance and interest rates starting to creep up, prices of new homes are stabilizing and attracting buyers to the market. For quality new construction that poises your home for future appreciation, visit Woodcraft Homes.