Build equity by purchasing a home
If you’re considering buying a home in Florida, there’s no better time than now to take the leap. While mortgage rates and home prices continue to dominate conversations about housing affordability, purchasing a home today is an investment in your future. Let’s explore why buying now and starting to build equity can set you on the path to financial success.
Home prices are projected to rise
According to recent research from Goldman Sachs, U.S. home prices are expected to increase by 5% in 2024, surpassing earlier forecasts of 1.9%. This upward trend is anticipated to continue, with a 3.7% rise projected for 2025. These figures indicate that homeownership today could save you thousands compared to waiting. As home prices climb, so does the equity you build in your property.
Mortgage rates show promise of decline
While mortgage rates remain higher than in recent years, they are expected to trend downward. As of January 4, 2024, Goldman Sachs predicted that 30-year mortgage rates would remain above 6% through 2025. They expected rates to drop to 6.3% by the end of 2024 and 6% by the end of 2025. Lower rates not only make home purchases more affordable but also present an opportunity to refinance in the future, further reducing monthly payments.
Low housing inventory creates value stability
The current housing market is defined by limited inventory. A phenomenon known as the “lock-in effect” is keeping many homeowners from selling, as they’re reluctant to trade their low-interest mortgages for higher rates. Meanwhile, new home construction—which accounts for about 15% of the overall inventory—continues to be hampered by labor shortages and supply chain issues. This scarcity supports home price appreciation, making today’s investment likely to grow in value over time.
Demographics favor sustained demand
The largest demographic group in the U.S., those aged 30 to 39, is entering their prime homebuying years. This age group is expected to grow over the next several years, sustaining strong demand for housing. Many in this demographic are making life decisions such as starting families, which often lead to choosing homeownership over renting. This robust demand further underscores the long-term value of purchasing a home now.
Building equity and generational wealth
One of the greatest benefits of homeownership is the ability to build equity. Each mortgage payment brings you closer to owning your home outright, while rising property values add to your wealth. Over time, this equity can be leveraged for major life expenses, such as funding education, starting a business, or enhancing retirement savings. For many families, homeownership is a cornerstone of generational wealth, offering financial security for future generations.
The cost of waiting
Waiting to buy a home can have significant financial consequences. Rising home prices and interest rates could mean higher monthly payments in the future, reducing affordability. By purchasing now, you lock in today’s prices and start benefiting from appreciation immediately. Additionally, owning a home allows you to escape the cycle of rent increases and put your money toward building your own wealth instead of your landlord’s.
Final thoughts
Despite challenges like higher interest rates, the case for buying a home now is compelling. Rising prices and sustained demand ensure that homeownership remains a sound investment, while falling mortgage rates offer hope for future affordability improvements. By purchasing a home today, you’re not just securing a place to live—you’re investing in your future and building equity that can benefit you and your family for years to come.
Start your journey toward financial security and generational wealth. Contact one of our qualified loan officers or fill out a pre-approval today to explore your options and take the first step toward homeownership in Florida.
