Faced with college loan debt and a tight labor market, many Millennials in their 20s and early 30s are putting off purchasing a home. According to U.S. Census data, home ownership for Americans under age 35 declined to 36.2 percent in the first quarter of this year. Another 36 percent of young adults ages 18 to 31 live in their parents' home. Others rent – which raises the question, "Does it make more sense to rent or buy?"
Buying a home still
makes sense.
Although increasing home prices in some areas might make renting seem attractive, home ownership offers many benefits – financial and otherwise. In a recent New York Times article, Neil Irwin noted that "thanks to low interest rates and home prices that remain 13 percent below their 2006 peak nationally, buying continues to look like a good deal in much of the country."
Although increasing home prices in some areas might make renting seem attractive, home ownership offers many benefits – financial and otherwise. In a recent New York Times article, Neil Irwin noted that "thanks to low interest rates and home prices that remain 13 percent below their 2006 peak nationally, buying continues to look like a good deal in much of the country."
Five advantages of
buying over renting
Every market and every prospective buyer are different, but here are some benefits of buying a home:
Every market and every prospective buyer are different, but here are some benefits of buying a home:
1. Equity
In the past 20 years, the median sales price of existing single-family homes rose 81 percent. For those who plan to stay in the same place for at least five to seven years, the increase in value can often offset the costs of buying the home. When that equity grows, the homeowner may be able to borrow against it for major purchases or educational expenses.
In the past 20 years, the median sales price of existing single-family homes rose 81 percent. For those who plan to stay in the same place for at least five to seven years, the increase in value can often offset the costs of buying the home. When that equity grows, the homeowner may be able to borrow against it for major purchases or educational expenses.
2. Predictable
payments
Rent payments can increase steadily or suddenly. With a fixed-rate mortgage, buyers pay the same amount each month no matter how many years they live in the home.
Rent payments can increase steadily or suddenly. With a fixed-rate mortgage, buyers pay the same amount each month no matter how many years they live in the home.
3. Tax deductions
Many home buyers can deduct mortgage interest and property taxes on their tax returns. Those who work at home may also be able to take home-office deductions.
Many home buyers can deduct mortgage interest and property taxes on their tax returns. Those who work at home may also be able to take home-office deductions.
4. Control
Unlike renters, homeowners can paint their walls any color they want and don't need to ask a landlord for permission to hang pictures or renovate. For many, that's priceless.
Unlike renters, homeowners can paint their walls any color they want and don't need to ask a landlord for permission to hang pictures or renovate. For many, that's priceless.
5. Pride of ownership
Buying a home is an investment, but also so much more. It's a lifestyle choice and continues to be part of the American dream.
Buying a home is an investment, but also so much more. It's a lifestyle choice and continues to be part of the American dream.
The
majority of the approximately 80 million Millennials have not yet made the move
toward home ownership. A Realtor® can make them aware of the advantages of
buying a home and encourage them to speak with a Mortgage Advisor, who can help
them understand what they might be able to afford. Great first steps!
No comments:
Post a Comment