Planning to live in your new home for more than three years? Now may be the perfect time to buy! Data compiled over the last 60 years by the Federal Reserve Bank of St. Louis shows that you should be able to retain your equity on your investment if you live in your home for more than 3 years, making now still a great time to start building equity in a brand new De Young home.

Median Sales Price of Houses Sold for the United States. Source: Federal Reserve Bank of St. Louis

The five-year rule in real estate says that you should live in your home for around five years before selling. This is because after about five years you will be able to build equity in your home.

“Five years is a good, comfortable mark,” says Lawrence Yun, chief economist at the National Association of Realtors (NAR). “If the price of your home appreciates considerably, then even three years would be fine, especially if your conditions require relocation.”

What is home equity?

“Home equity is the current market value of your home, minus what you owe,” states NerdWallet. Over time, as the principal balance on your loan is paid off, you will be able to turn your debt into an asset.

There have been huge increases in the price appreciation of homes, with homes in California appreciating 319.13% since 1991, according to data from the Federal Housing Finance Agency.

“Homeownership is the largest source of wealth among families, with the median value of the primary residence worth about ten times the median value of financial assets held by families,” says the National Association of Realtors.

So, why is now still a great time to buy a new home? There’s only been one time in the last 60 years where you had to be in your home for 5 years to retain the full equity of your investment! If you are planning to live in your new home for 3+ years, then now is still a fantastic time to buy a new De Young home. If the monthly payment works for you, then why not live in your dream home NOW?

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