Are you a baby boomer contemplating a change after residing in your current home for a substantial period? If you're considering selling your house, you have a multitude of factors to weigh. Questions about relocating to a different state, downsizing, or seeking more space to accommodate your loved ones may be top of mind. However, one of the most significant decisions to make is whether to purchase your next home or opt for renting instead.
The choice between buying and renting depends on your present circumstances and your future plans. Here are two crucial factors to help guide your decision:
Expect Rents to Continue Rising
The following graph utilizes Census data to illustrate the consistent upward trajectory of rental costs since 1988:
Over the long term, rent prices have exhibited a consistent increase. Opting to rent may entail the risk of encountering higher rental payments upon each lease renewal. Dealing with an escalating rental expense year after year may not align with your preferences.
When you purchase a home with a fixed-rate mortgage, it enables you to stabilize your monthly housing payment. This allows you to lock in a consistent monthly payment for the entire duration of your home loan. This stability keeps your housing costs predictable and steady over the long run. Freddie Mac summarizes this benefit as follows:
". . . 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."
Homeownership Offers Unique Benefits
According to AARP, buying your next home proves to be a superior long-term strategy compared to renting:
"Though each option has pros and cons, buying provides more pros, with a broader range of benefits."
To assist you in making an informed choice post-sale, here are a few of the advantages of homeownership outlined in the article:
Homeownership can facilitate future savings.
Your home, along with the equity you accumulate as a homeowner, has the potential to generate generational wealth that can be passed down to your loved ones, providing them with an improved quality of life.
You may not need to make a monthly mortgage payment.
If you have enough equity to purchase your next home outright, you won't have a monthly mortgage payment. While you might still be responsible for property taxes or maintenance costs, the relief of not having a monthly mortgage payment can be significant.
Adapting to changing needs can be more straightforward.
Homeownership affords you the freedom to make renovations and updates that can enhance your daily life if your requirements evolve over time.
If you're a baby boomer contemplating whether to buy or rent your next home after selling your current one, it's advisable to consult a trustworthy real estate agent for guidance. Given the consistent rise in rents and the numerous benefits of homeownership, it may make sense to consider purchasing your next home.
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