Buying a home is one of the best ways to build future wealth.
However, most millennials aren’t aware of this fact.
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According to a study done by the Urban Institute, members of the millennial generation are less likely to own a home compared to their baby boomer and Gen X elders at the same age. Delaying homeownership, according to UI analysts, may reduce the wealth that this generation’s members will acquire over their lifetime.
By buying at an early age, buyers get a big bang for their housing buck. Individuals who made their first venture into homeownership between the ages of 25 and 34 have a median household wealth of $150,000 in their early 60s. Those who waited until they were 35 to 45 accumulated $72,000 less on average. Those who didn’t buy until 45 or later accumulated a median wealth of at least $100,000 less than those in the 25 to 34 age group.
These UI researchers concluded that the age at which a person buys their first home has a great deal to do with their housing-related wealth as they approach retirement. Thus, millennials’ delay in homeownership could have a long-term economic consequence for their future and the nation’s economic welfare as they fail to build equity, which is the single largest source of a person’s wealth.
By buying at an early age, buyers get a big bang for their housing buck. Individuals who made their first venture into homeownership between the ages of 25 and 34 have a median household wealth of $150,000 in their early 60s. Those who waited until they were 35 to 45 accumulated $72,000 less on average. Those who didn’t buy until 45 or later accumulated a median wealth of at least $100,000 less than those in the 25 to 34 age group.
These UI researchers concluded that the age at which a person buys their first home has a great deal to do with their housing-related wealth as they approach retirement. Thus, millennials’ delay in homeownership could have a long-term economic consequence for their future and the nation’s economic welfare as they fail to build equity, which is the single largest source of a person’s wealth.
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More young adults should take into
account the long-term consequences of
renting when homeownership is an option.
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account the long-term consequences of
renting when homeownership is an option.
While people make the choice to own or rent that suits them at a given point, maybe more young adults should take into account the long-term consequences of renting when homeownership is an option.
If you have any questions or would like to talk to a real estate professional who can give you some sound advice and guidance on investing in your future, don’t hesitate to give us a call or send us an email today. We would love to hear from you.
