Homeownership can still build wealth, expert says, but the days of outsized gains ‘are behind us’ The rapid home-price appreciation seen during the pandemic housing boom, which often reached double digits annually, is unlikely to be repeated. Projections from Moody’s Analytics and Fannie Mae indicate average annual home-price growth of around 2.1% to 2.2% between 2026 and 2035, a significant slowdown from the past decade’s roughly 5% appreciation. This shift is attributed to increased affordability constraints, driven by higher home prices and elevated mortgage rates, which are altering the traditional equation of homeownership as a rapid wealth-building asset.

• 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’.