My husband and I have been renting in some form or another for the last couple years. It’s worked but we’re craving the freedom of owning our own place. And so this question frequently rings in my head: “Is buying really worth it?”
With so much at stake for us and our young son, we want to be well-versed in the oft-complicated world of real estate. Buying a home is a big step; it’s not to be taken lightly. Here are a few things I’ve learned while doing my homework:
1. It takes time.
Millennials like myself who are interested in buying a home are setting a record: We’re buying homes later and later. In the 1970s, the typical first-time home buyer rented for about two-and-half years before buying a home; that number jumped to six years as of 2015. Meanwhile, the median age for the first-home buyer is 33, three years older than a generation ago, adds The Chicago Tribune.
Why the change? Student loans, for one. Carrying debt obviously affects effectively saving money for any big purchase, and in a study conducted by Harvard University, nearly half of surveyed students ages 18 to 29 carry some kind of student loan debt.
We see this in the number of people who are living with their parents. Nearly a third of people ages 18 to 34 live at home in 2016, reports the Pew Research Center. “In 2014, for the first time in more than 130 years, adults ages 18 to 34 were slightly more likely to be living in their parents’ home than they were to be living with a spouse or partner in their own household,” notes Pew.
So while millennials may want to buy a home, the odds aren’t always in their favor. My husband and I have seen it ourselves as we attempt to save enough for a down payment.
2. Talk it out.
The decision to buy a house is not one to be taken lightly and it is important that you and, if applicable, your partner are on the same page. Schedule a time to discuss what each of you are looking for. Ask questions. Why do you want a house? What do each of you see as the pros and cons of buying a home? How long do you plan to be at this property?
3. Location, location, location.
Location can be the difference between a good home and a great one. Keep your personal motivations in mind as you consider an area. Currently, we live in a town that requires us to drive 30 minutes for the nearest attractions. For those who love a rural setting, that’s wonderful. But for us, not so much.
Also consider the future when it comes to location. If you have children or plan to, where you live matters to them, too. Can your children play safely in this neighborhood? Where will they hang out? A town with few parks, community centers and family-based attractions is unlikely to be child-friendly.
Also consider the neighborhood’s access to education. Regardless of your preferred school model (home, public, private) it’s helpful to know the amount of local resources for each. If you are considering homeschooling, are any other local families doing the same? How do the nearby private schools measure up? Do the property taxes seem to adequately support local public schools?
4. How long are you staying?
Ask yourself, “How long do I see myself at this new place? A few years? Until the kids graduate high school? Until I die?” The answer to this question is important, particularly when it comes to choosing the length of your mortgage. Selecting a longer term option may mean lower monthly payments, but there are consequences such as eventually paying more because of interest.
What factors do you consider when buying a home? Share in the comments below!