economy
Homeownership can still build wealth, expert says, but the days of outsized gains 'are behind us'
Americans got used to homes gaining value fast, but economists say things may slow down over the next decade.
TL;DR
- Home price growth is projected to average around 2.1% annually from 2026-2035, down from the double-digit gains seen during the pandemic.
- Higher home prices and mortgage rates (around 6-7%) have made affordability a significant constraint on future price growth.
- While homeownership still builds wealth, it may become a slower, steadier process rather than a source of rapid, outsized gains.
- Buyers may need to stay in their homes longer (7-10 years) to build meaningful equity due to slower appreciation and transaction costs.
- Homeownership continues to offer advantages like building equity with a down payment and forcing savings, but the investment equation has changed from the 'pandemic rocket ship'.