Should Baby Boomers Buy or Rent After Selling Their Houses?
Are you a baby boomer ready for a change after years of living in your current home? There is much to consider when deciding to sell your home. Will you move to a different state or stay local? Is it time to downsize, or do you desire a more open space to accommodate your loved ones? These are essential questions, but the most significant consideration is whether you will buy or rent your next home.
How do you determine which path is right for you? It ultimately depends on your existing situation and your future plans. Here are two crucial factors to help you navigate this decision.
You Can Expect Rents to Keep Increasing
Data from the Census shows how rent has been steadily climbing since 1988. (See graph below)
This increase has been consistent in the long run. When you choose to rent, you take the risk of your rental payment rising with each lease renewal. When selecting your future home, ask yourself: Am I prepared to pay a higher rental expense yearly?
When you purchase a home with a fixed-rate mortgage, it helps stabilize your monthly housing payment. This enables you to lock in your monthly payment for the duration of your home loan. The benefit of this is steady and predictable payments for the long haul. Freddie Mac sums it up like this:
“. . . homeowners with fixed-rate loans will see little to no change to their monthly housing cost over the life of their loan. You can be confident in knowing that your mortgage payments won’t change much in the long term, even when life’s other costs do.”
What are the Unique Benefits of Owning Your Home?
AARP states that buying your next home is a more promising long-term strategy than renting: “Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”
Here are just a few of the benefits of homeownership that the article covers:
1. Owning your home can assist you in saving money for the future. Generational wealth passed on to loved ones, giving them a better life, can come from your home and the equity you build as a homeowner.
2. You may not have to pay a monthly mortgage payment. Do you have enough equity to buy your next home outright? You wouldn’t have a monthly mortgage payment on your next home. While you might still need to cover property taxes or maintenance fees, not having to worry about a monthly mortgage payment is a significant financial relief.
3. Aging in place can be more comfortable. As your needs change, owning your home creates the freedom to make renovations and updates that make everyday life easier.
Are you a baby boomer wondering whether you should buy or rent your next home? With rent consistently increasing and homeownership providing numerous benefits, consider buying your next home. The Just Say Home KC team of real estate experts is ready to help you make the best decision for you and your family moving forward!