Why People are Waiting to Buy their First Home
Since the turn of the century, the average age of first home buyers has increased. It now ranges anywhere from 28 to 33 according to the National Association of Realtors. There are many reasons for this rise in age. Three of the major ones are: the last recession, student debt, and higher rents. The second two were natural effects of the recession. With higher rents, future home buyers are having to spend more of their income to keep up with those bills. This prevents them from being able to save money to buy a home, which in turn prevents them from having enough for a down payment. Student debt is another inhibitor because so many people are affected. It is apparent that it’s difficult to come out of school with little to no student debt, and the problem only gets worse every year. When having to pay these staggering loans off, savings accounts become nearly impossible to maintain. This is why it is important to begin saving money early on in life. Not only does it teach responsibility, but it is also good to have access when it is needed. Using savings rather than credit cards helps save interest which helps to save money.
There are pros to buying a house earlier in life that should be considered. One of which is, the younger you buy a home (assuming you get a 30 year fixed rate and don’t refinance) you can own it free and clear before you retire. Also, home ownership is a great way to start accumulating wealth. Tax breaks are also available for homeowners that they may not otherwise be able to access when renting.
The Bottom Line: Save early, spend wisely, and most importantly, buy a home you love.