For most Americans, purchasing a home is the single largest investment they will make. Your home probably represents a substantial percentage of your net worth. When developing your financial plan, it is essential to consider the value of the home, what the anticipated increase in value may be over time, the property taxes to be paid, and the expected maintenance and upkeep that come along with home ownership.
The S&P CoreLogic Case-Shiller Index is an economic indicator that measures the change in value of single-family U.S. homes.
As of August 2024, this index reported an annual gain on single-family homes of 4.2% (down from 4.8% the previous year). Home prices have hit record highs for 15 consecutive months. Currently, all regions in the U.S. show growth, with the Northeast being the strongest performing region.
While real estate investment can be a valuable component of a balanced portfolio, it is important to remember that historically, the average rate of return on stocks (as represented by the S&P 500 Index) has been between 9% and 10% annually. Single-family homes have provided an annual growth in value of 3% to 5% (with location playing a large role) and come with additional considerations, such as taxes and upkeep.
Understanding the power of compounding returns and how it impacts future values is something many of us do not fully understand.
Consider the following examples:
Over 30 years the future value of an investment earning 4% (typical return expected for residential real estate) will grow to be about 3 times greater.
At 9% (typical of stocks) it will grow to be about 13 times greater.
For your review is the August S&P Core Logic Case-Shiller Index for the 10 years ending August, 2024.
Sincerely,
Thomas Curran
Founder & Co-CEO
Curran Wealth Management
At Curran we value service over sales and believe quality service yields happy clients. Below is our 4-step process (the first three steps at no cost to you).
A short introductory call for us to get to know one other. During this call we will discuss your financial goals, concerns and hopes for the future.
In this meeting we will go over your current financial situation, take a deeper look at your goals, discuss your risk tolerances, and collect the data necessary to build a formal proposal.
Based on our data gathering session, our Private Wealth Managers will present you with a custom proposal tailored to your needs. We encourage individuals to take the time to evaluate this proposal.
If you are comfortable with the proposal and choose to invest with Curran, our team will be there every step of the way assisting in opening the recommended accounts and facilitating all necessary parts of your onboarding process.
