Homeownership has always been an integral part of the traditional American dream. Today, however, many millennials (those born between the years 1981 and 1997) have put that dream on hold. According to the National Association of Realtors, homeownership among people under the age of 35 is down to 36 percent, from a 2005 high of 43 percent, and the average age of first-time homebuyers is 33 years old.
While many things are contributing to this trend – the recent recession, delayed marriage, and student loan debt, to name a few – the fact remains that buying a home is a smart financial decision, one that can provide stability and an investment in your future. While the decision of whether to rent or buy will rely heavily on your own situation, there may be times in a young millennial’s life when he or she isn’t quite sure which bet is best. If you’re one of those people hanging out on the fence, here are some compelling reasons to hop on over to the homebuyer side.
Owning a home will help you build equity.
While very few people pay for a home in cash, each mortgage payment you make brings you a little bit closer to truly owning your home. You can also borrow against your home to help pay for other major purchases, such as a car. You can even refinance your home at favorable rates, which is a great way to make improvements and updates to your home and increase its overall value. Renting, on the other hand, gives you fewer options. When your lease is up, you have nothing to show for all those years you were paying rent.
Owning a home is great for your taxes.
Not only can you deduct the interest paid on your mortgage each year, you can also deduct your property taxes, a perk that renters don’t get to take advantage of. If you’re a first-time homebuyer, you can claim the “points” (also called origination fees) on your loan, whether they were paid by you or the seller, and enjoy considerable savings. Thanks, Uncle Sam!
Owning a home offers stability and security.
Renting is, by its very nature, a temporary situation. At some point, you’ll have to pack up and leave, and you can’t always control when that happens. When a lease is up, the landlord can elect not to renew, taking the control out of your hands. If you have a job you’re committed to, a neighborhood you love, or kids in school, the ability to guarantee where you’ll live and for how long is priceless. Mortgages are also fixed, which means you don’t have to worry about a landlord suddenly raising the rent, which can help with the long-term planning of your financial future.
Owning a home gives you full creative control.
Think back to the first few places you rented. Heck, think about the place you’re renting right now! I’m sure you’ve daydreamed about things you’d change if you owned the place. Different color paint on the walls, replacing the deck, building a shed to store your projects or belongings, a new refrigerator … the list goes on and on. If you’re a person who likes to be in control, then owning a home is the only want to guarantee that you’re in charge of one of the most important things in your life – the place where you live.
Owning a home will make you (not to mention Mom and Dad) proud.
Over the years the American dream has shifted, changed and transformed, but some things have remained the same. The ideas of independence, responsibility, and individuality will always be important, and owning a home is one of the best ways to achieve all these things. The pride that comes from signing that contract and getting your first set of keys can’t be beaten.