Today, it was reported that the median price of a single-family home dropped 2.3% in August. The stock market sold off on the news. For some perspective into the all-important US real estate market, this chart illustrates the US median price of a single-family home over the past 39 years. Housing prices increased at a rapid rate from 1998 to 2006, approximately 7.37% annually after adjusting for inflation. However, housing prices are currently 30% off their 2006 peak.
Putting dollar figures to these percentages, a home purchased for $25,000 in 1970 would now be worth approximately $176,800, an annual return of 5.14% (only 2% after adjusting for inflation). By comparison, an investment in the S&P 500 over the same period would have achieved a 10.32% annual rate of return, (7% after adjusting for inflation). Thus, a $25,000 investment in the S&P 500 in 1970 would now be valued at $349,870.
Speak with an independent fee-only financial advisor to determine whether a home purchase is appropriate for your situation.
For more information, visit http://www.utahfinancialadvisor.blogspot.com.
About Mr. Jefferies
Lon Jefferies is an investment advisor representative with Net Worth Advisory Group, a fee-only financial planning firm in Salt Lake City, Utah. He is a member of the National Association of Personal Financial Advisors (NAPFA) and a candidate for CFP™ certification. He possesses an MBA and bachelor's degrees in Finance and Marketing from the University of Utah. Lon writes articles for local magazines such as Business Connect and Utah Business Magazine, and he consistently contributes articles to online magazines such as FIGuide.com and FILife.com (by The Wall Street Journal). Additionally, Lon is a platinum expert author at EzineArticles.com. Lon has been quoted nationally in publications such as the NY Times and Investment News.
Contact Info
View Lon's blog at http://www.utahfinancialadvisor.blogspot.com, and visit Net Worth Advisory Group's home page at http://www.networthadvice.com. Lon can be emailed at lon@networthadvice.com, or phoned at (801) 566-0740.
