Buying a home is a cornerstone of the American Dream, as having a place to call your own is considered the pinnacle of stability. Home ownership is still considered an accomplishment in terms of investing in yourself. However, regardless of how home ownership is lauded as a lifetime achievement mark, people’s attitudes toward purchasing homes are evolving.
According to a report by Bloomberg, 2016 saw homeownership at its lowest point since 1965, coming in at only 62.9%. While this is still (mostly) a residual effect of the housing crisis of 2008, the idea of owning a home can be daunting to a lot of folks. This is a big investment people are making, and one they don’t take lightly. Taking the leap to home ownership involves committing oneself to a specific location for a considerable amount of time, as well as predicting the value of how much that home will be worth in the coming years.
Don’t get me wrong, homeownership isn’t all doom and gloom. In fact, according to the National Association of Realtors, 84% of Americans agree that owning a home is still a sound investment. With this in mind, it has to be asked: when is the right time for you to take that leap?
Owning Versus Renting
Whether owning a home is the optimal choice over buying has been a highly contested debate for decades. As most of us know, there can be quite a bit of benefit to renting. For starters, renting allows people to rely on landlords to manage repairs/maintenance and utilities. Additionally, the short-term nature of renting makes it easier for people to relocate. According to a study by Nerdwallet, it’s unanimously cheaper across the country to rent than it is to buy. Albeit, where you live, and how much you make, is obviously going to play a pivotal role in cost, but the fact still stands that renting, by and large, is a much more affordable option. However, that affordability can come with a cost.
For most young professionals, renting is the obvious choice given lower income rates and the need to find flexible living arrangements. But once people reach certain life milestones, living in a rental can be difficult especially if you kids are in the mix. For example, if something occurs such as a ceiling leak or rodent infestation, then it’s up to your landlord to fix it. Considering that landlord laws vary from state to state, there’s no definite time window as to when the problem could be alleviated. Plus, not every landlord is liable to pay for any additional lodging that might be necessary during repairs.
Take the time to examine your family’s needs, and what type of time table you’re looking at. If your children are still at an age before preschool/elementary school, then finding a comfortable spot to rent while saving up to buy a home isn’t a bad idea. Remember, making this decision really boils down to two things: comfort and affordability.
The Option To Buy
If you have young ones, then you’re going to want to buy a comfortable place to live sooner rather than later. But before you start scouring around town for that perfect home, consider a few factors. According to Zillow, the average age someone buys a house is 33, which makes sense given that at this age, people are more likely to be settled into their careers and locations. However, kids can also complicate the buying process.
Believe it or not, I’ve seen parents wait for years before buying because they want to land a house in a great school district.Additionally, a lot of parents have an idea that once they’ve committed to a home with children, they have to stay forever, because the idea of uprooting children is daunting.
Overall, the housing market is in a pretty stable place, with plenty of financial opportunities to help with affordability. So, take the time to compile your criteria for what you value most in a home. Is it the schools? The neighborhood? The space? Finally, no matter what you decide, trust your gut. No living situation is going to be 100% perfect, but as long as you’ve done your research and defined your priorities you’ll have a better chance of finding a living option that works for you.