Exactly. 3% annual appreciation sounds modest, but compounding over decades can create substantial wealth.

For example, a $500,000 home appreciating at 3% annually:

• 10 years → $672,000
• 20 years → $903,000
• 30 years → $1.21 million
• 40 years → $1.63 million

That’s without counting mortgage principal paydown, improvements, or rental income.

The key idea is that you’re not earning 3% on the original $500K forever—you’re earning 3% on the increasing value of the property. That compounding effect is what makes long-term ownership powerful.

The bigger message is that interest rates are only one part of the affordability equation. When inventory increases, buyers have more negotiating power, and sellers who price correctly can still attract serious buyers, even in a higher-rate environment.

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