Buying a Home Young is the Key to Building Wealth
Homeowners who purchase their homes before the age of 35
are better prepared for retirement at age 60, according to a
new Urban Institute study. The organization surveyed adults
who turned 60 or 61 between 2003 and 2015 for their data
set.
“Today’s older adults became homeowners at a younger age than
today’s young adults. Half the older adults in our sample bought
their first house when they were between 25 and 34 years old, and
27 percent bought their first home before age 25.”
The study goes on to show the impact of purchasing a home
at an early age. Those who purchased their first homes when
they were younger than 25 had an average of $10,000 left on
their mortgage at age 60. The 50% of buyers who purchased
in their mid-twenties and early-30s had close to $50,000
left, but traditionally had purchased more expensive homes.
Many housing experts are concerned that the
homeownership rate amongst millennials, those 18-34, is
much lower than previous generations in the same age range.
The study results gave a great reason why this generation
should consider buying instead of signing a renewal on their
lease:
“As people age into retirement, they rely more heavily on
their wealth rather than their income to support their
lifestyles. Today’s young adults are failing to build housing
wealth, the largest single source of wealth, at the same rate as
previous generations.
While people make the choice to own or rent that suits them at a
given point, maybe more young adults should take into account the
long-term consequences of renting when home ownership is an
option.”
Bottom Line
If you are one of the many young people debating whether buying
a home this year is right for you, or you know a young person who
can benefit from buying their first home, contact me to explore
available options!
Source: Keeping Current Matters