If recent home price headlines have you feeling nervous, here’s some perspective that could help you breathe easier. Enter the 5-Year Rule — a guiding principle for homebuyers looking to make smart decisions, even in uncertain markets.

What Is the 5-Year Rule?

According to Lance Lambert, Co-Founder of ResiClub:

“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.”

In other words, if you’re planning to stay in your home for five years or more, you’re more likely to ride out market dips and benefit from the long-term trend: home values usually rise over time.

Why Does It Matter?

• Historically, home prices have trended upward, even after downturns like the Great Recession.

• The latest data shows an average annual appreciation of 4.55% over decades (FHFA).

• While some markets are seeing minor declines today, most are still up significantly compared to five years ago.

The Proof: Long-Term Gains Offset Short-Term Dips

Even markets experiencing slight drops today have seen dramatic growth since 2020:

• Austin, TX: +33.3% since 2020 (despite -5.1% year-over-year)

• Miami, FL: +57.8% since 2020

• Phoenix, AZ: +47.3% since 2020

The trend is clear: the longer you hold, the more protected you are from short-term volatility.

Bottom Line

If you’re worried about today’s housing headlines, zoom out. Real estate rewards patience. If you plan to stay put for at least five years, history suggests you’ll come out ahead.

Let’s talk about what this means for your move and how the latest local trends fit into your plans.