Happy Sunday everyone! As the summer kicks off we have a ton of exciting content in store for Home At 30 readers.
We recently ran a promotion giving away five must-read summer books for free. We also have the incredible Money Master Course live.
Next up for us this summer is a newer but highly important area of focus for folks our age – real estate. Buying your first home as a young professional is a financial decision that can impact the rest of your life. We built a guide to help you do it right.
The upcoming guide covers everything when it comes to a home buying decision for a young professional. From the best mortgages to real estate agent tips, to market demographics, we’ve built out everything in an easy-to-read format. We took a post from earlier this year and brought it to a whole new level.
Hopefully, you will find it helpful enough to use once a home is on the horizon in your life. For today, I wanted to share an excerpt from the upcoming article with everyone.
Buying Your First Home – Sneak Peek at the Guide
The U.S. housing market has been on a rollercoaster ride for the last decade. I covered some key trends and what to look out for in our guide. Read on for a quick preview; you might even impress your friends by knowing some of this stuff!
For homeowners, the past decade has been a great ride. The 2008 financial crisis saw a low point in average home valuation across the United States. After dipping as much as 18-20%, home values have been on a steady climb from there. A first time, young professional homebuyer in 2018 needs to face this decade of increasing prices head-on, however!
Historical appreciation of homes in the U.S. has averaged 3% per year historically, with a 6% rate more accurate since the ’08 crisis. Certain areas in the country have seen different growth rates in line with other economic factors, like population growth and GDP.
In the chart, we are looking at HPA (home price appreciation) versus GDP (gross domestic product). We see an already heavily populated and bustling city like NYC growing at a much slower pace than a newly booming city like Denver or Charlotte. This means that home prices are skyrocketing in value, relative to how developed the economy is, in cities with the larger circles.
Not only do home prices rise in growing GDP markets, but also in steady housing markets for different reasons. Many serial property owners in NYC, Chicago, and the more established cities will buy up many properties and re-sell to renters.
The net-net of this all is that home buying is just about as expensive as it has ever been. This is due to the increasing rate at which people are buying homes to rent out, rather than live in themselves. The United States is effectively a “renter’s nation” as of 2018, making it tougher than ever for a young professional home buyer with simple aspirations of ownership.
Just how far have we come?
For a bit of perspective on how housing prices have evolved in the United States since the baby boomer generation; the median home value in 1940 was a staggering $2,938! This is before adjustments to inflation, but it’s such a crazy difference from what we see today.
Housing has (obviously) seen a relatively steady incline since the 40’s. A few dips saw home values drop slightly over the decades. Nothing caused more market carnage than the 2008 crisis, however – not even close. It’s generally a common sentiment that homes will appreciate in value over time, looking back historically. Almost nobody saw that 2008 crash coming, and stopgaps have since been put into place to make is highly unlikely to happen again.
The Guide of Guides – Coming Soon
And there you have it. A quick excerpt of our upcoming guide which reflects on historical and recent buying trends.
In researching the home buying guide over the last few months, a common theme became more and more apparent. While there are tons of resources on the world wide web for buying a home, few (if any) have it all in one place AND cater to a young audience at the same time. We want the average reader of Home At 30 to have a straightforward, all-in-one spot to come back to when the time is right for you.
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.
Author: Joe Savoia
Joe is a 2014 graduate of Northeastern University and currently works in a field sales role for technology company Acquia. He has worked internationally as one of Acquia’s earliest Australia-based employees and helped in the early stages to develop that region. Today Joe is based out of Boston and lives in Somerville, MA. Joe’s primary interests vary widely, including everything from robotics/AI to finance, blockchain, and the rapidly evolving world of tech we live in.