Simply put, there is no “right” age to purchase a home, but it’s never a bad idea to start evaluating the ideal time for this investment. Buying a home is the biggest investment in most peoples’ lives, and can result in either helping or hurting you financially.
When Should You Buy A House?
According to the National Association of Realtors, the median age for first-time homebuyers was 32 in the year 2017. Legally speaking, you must be at least 18 years old to buy a home in most states. Of course, the best time to make this purchase is when you can comfortably afford the payments and take care of any unexpected repairs.
Buying a home has the potential to benefit you at any age, depending on the conditions. If you can check all the following boxes, you may be ready to buy a home right now:
❒ Can you comfortably afford the monthly and other recurring expenses associated with homeownership?
❒ Are you ready for the responsibilities of owning and maintaining a home?
❒ Can you get approved for a good loan?
❒ Do you plan on keeping the home long enough to recoup transaction costs from the buying and selling processes?
❒ Can you financially handle any unexpected maintenance or housing market issues?
Owning and maintaining a home is undoubtedly an expensive and time-consuming endeavor. Renting comes with its own set of unique challenges, but it is significantly easier to move when you’re only bound by a six-month lease.
At What Age Do Most People Buy?
Refrain from buying a home simply because others in your age group are doing so. It’s vital to live your own life at your pace, but it can be helpful to know when other individuals typically purchase a home.
According to the U.S. Census Bureau, these were the homeownership rates by age in 2020:
- 35-44 Years Old: 61%
- 45-54 Years Old: 69%
- 55-64 Years Old: 76%
- 65+ Years Old: 80%
Benefits Of Buying A House While Young
There could be several benefits of buying a home while you are young, including the following.
While there is no guarantee that your home gains value, this is what happens in most cases. Real estate helps hedge against inflation, assuming that your property rates stay in line with rising costs. Price appreciation could contribute to your wealth accumulation, especially when living in a strong market. The safest idea is to simply buy your home to live in it; not for the investment opportunity.
Assuming all goes according to plan, owning a home can be a pathway to increasing your net worth. The “forced savings” of your monthly payments will help you build equity in the property. Forced savings comes from the fact that you can save some of your monthly payment instead of simply giving 100% directly to your landlord.
Owning a home means you can customize the appearance or layout, make improvements and become part of the community. You no longer need the permission of a landlord or have to worry about getting your security deposit back. Of course, local rules and/or HOA restrictions could limit your choices, so just make sure to research the property before making a purchase.
Benefits Of Waiting To Buy A House
Waiting to make this purchase can also prove beneficial. Here are a couple reasons why waiting to buy is wise.
As you age, you’ll start to visualize what you want in a home. The future is uncertain, but over time you’ll gain more clarity on several important factors regarding housing. You’ll want to consider how much you can afford to pay monthly, the location relative to where you work, the size of your family and what you are willing to live without.
Many people will earn more money as they age and grow in a career path. Once you hit your higher-earning years, it’s easier to afford the things you want without making sacrifices. People struggling to keep up with housing payments in their 20s and 30s are commonly referred to as “house poor.” You can avoid this distinction by waiting to purchase a home until you are financially stable.
Other Factors To Consider When Buying A House
Always make sure to consider these five factors below before making a purchase.
A down payment helps minimize your monthly payments and interest costs. Putting down at least 20% will also help you avoid paying extra private mortgage insurance. Evaluate the tradeoffs before you decide on making a minimal down payment.
Is it possible that your income or work location will change in the immediate future? If a career change is coming, figure out what impact that could have on the potential purchase of a home.
Local conditions will undoubtedly steer you in the direction of either buying or renting. When rent is high, yet purchase prices are reasonable, it may be time to buy.
When you own a home, everything is your responsibility. If there is a leak in the home, it must be addressed immediately to prevent further damage. Figure out if you are willing to tackle the various issues associated with homeownership before taking the plunge.
There’s no question that buying a home can be risky. You are likely paying off a huge loan without the promise of the property value rising. Financial losses can be difficult to take at any age, unfortunately.
Frequently Asked Questions
From pricing to architecture, these are some of the most frequently asked questions about the home building process.
How Much Does It Cost To Build A House?
On average, it will cost $297,139 to build a house in the U.S. in 2022. Prices will range from $153,570-$477,534, according to HomeAdvisor.
Is It Cheaper To Build Or Buy A House?
It will cost more to build a house than buy a house. In some cases, it can cost up to $150,000 more to build rather than buy a home.
Is Buying A House Worth It?
Yes, if customization is your main priority, then building a home is definitely a great investment. Buying an existing home can lead to long and expensive remodeling projects if you wish to change or add any features to the home.
What Factors Will Affect The Total Cost?
The four main factors that can influence the overall cost the most are materials needed, project time, operational efficiency, and location.
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