Buying young has its benefits!
Most of today’s older adults purchased a home at a younger age than today’s adults. Millennials are purchasing homes later, and have lower homeownership rates than baby boomers and Gen Xers. According to a study done by the Urban Institute, of the “older adults” they sampled, a whopping 27% had purchased their home before the age of 25, compared to today’s 18-24 year old population which have an ownership rate of 13%.
If you’re part of the younger half of the millennial generation, there are benefits to purchasing early, assuming your circumstances allow it. Purchasing your home between the ages of 25-34 will prepare you to have the most home wealth when reaching your 60s. Of those in the study aged 60 or 61, the median home equity was close to $150,000, compared to just over $76,000 for those who purchased between the ages of 35-44, and just under $44,000 for those who purchased at 45 or older.
Another interesting tidbit from this study is that those who bought their first homes when they were 25-34 tended to live in more expensive homes in their 60s than those who bought under 25 or over 35.
Overall, those that purchased their first home earlier are just overall, more financially healthy in their 60s.
When considering whether to rent or buy, it’s important to look at the bigger picture, and to weigh the long term benefits or consequences of homeownership.
You can read the full summary of the report’s findings here.
Have questions about what it takes to purchase your first home? Click here. We’d love to help answer your questions or get the wheels in motion.