The 5-Year Rule for Home Prices: What It Means for You

Hi there — it’s Melinda Walencewicz! 👋

If you’ve been feeling a little uneasy about all the headlines swirling around home prices lately, I want to offer you some steady ground. You’re not alone — it’s normal to feel uncertain with all the noise out there. But here’s the truth I want you to know: in real estate, time can be your greatest ally. Let’s talk about what I call the “5-Year Rule” — and why it might give you some peace of mind. 💡

Home Values Usually Rise Over Time 📈

You may remember the housing crash during the Great Recession, and that memory still lingers for many. But that period was the exception, not the rule.

If we zoom out and look at the bigger picture, the data shows us something really encouraging: home prices almost always go up over time. In fact, when we look at seasonally-adjusted, year-over-year price changes, the average is around 4.5% annual growth. Even when there are small dips, they tend to be temporary.

It’s a lot like the stock market — there may be some bumps, but the long-term trend has been upward. And that’s especially important if you plan to stay in your home for five years or more.

The Long-Term Gains Offset Short-Term Dips 🛠️

Right now, some markets across the U.S. are experiencing small declines. But even in those areas, home values are still significantly higher than they were five years ago. That means if you bought in 2020 or earlier, you’ve likely gained solid equity — even if your local market has seen a slight pullback this year.

Real estate isn’t meant to be a quick flip for most people — it’s a long-term investment. And over time, those gains can help you build wealth, protect against inflation, and create financial flexibility for the future.

So, What Is the 5-Year Rule? 🏡

Here’s how I explain it to my clients: If you plan to live in a home for five or more years, you can usually ride out any temporary market fluctuations. That time gives your investment the chance to grow and recover from short-term dips.

Lance Lambert, Co-Founder of ResiClub, puts it simply:

“There’s the ‘five-year rule of thumb’ in real estate—which suggests that most buyers can buffer themselves from mild short-term declines if they plan to own a property for at least that amount of time.”

And it’s true. I’ve seen this play out with clients again and again. Buying with a 5-year (or longer) horizon gives you stability, flexibility, and often equity growth.

Let’s Talk About What This Means for You

If you’re thinking about buying, selling, or just staying informed — let’s connect. Your situation is unique, and you deserve guidance that’s tailored to your goals. Whether you're in Tolland, Windham, or anywhere across eastern Connecticut, I’m here to walk you through the market with clarity and care.

📞 Call me at 860-985-4363 or head to melindatherealtor.com for your free consultation.
💬 Never too busy for you to be my #1 client.

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