The answer?
There’s no right age to buy a home.
But what should be the determining factor is where you are in your own life. Purchasing a home is the most significant investment most owners make in their lifetime, and your status as a homeowner can help you or hurt you financially speaking.
Perhaps most importantly, it affects your quality of life.
When Should You Buy?
Buying a home can benefit you at any age, young or old, as long as the conditions are right. You might be ready to buy when, at a bare minimum, you:
- Can afford the monthly payments and expenses of home ownership;
- Can get approved for a good loan (or better yet, pay cash);
- Plan to keep the home long enough to recoup transaction costs from buying and selling, as well as any price declines;
- Can afford the risks, including surprise maintenance expenses or your home losing value in a weak market.
None of that is meant to suggest that you’re irresponsible if you don’t buy a house at a certain age. Owning a home can be an expensive, time-consuming, and frustrating endeavour. Renting comes with its own set of challenges, but it’s a lot easier to pack up and leave when the only thing holding you down is a one-year lease.
At What Age Do Most People Buy?
It’s important to live your own life, but it might be helpful to know when others typically buy. There may be good reasons behind the fact that homeownership rates increase with age. On average most become homeowners later in life.
Age Range Homeownership Rate
35 to 44 years old 58.9 percent
45 to 54 years old 69.5 percent
55 to 64 years old 75.3 percent
Age 65 and over 79.2 percent
Reasons for Buying Young
If you have the ability and desire to buy young, there are potential benefits to getting an early start.
Build wealth: Assuming things go well, owning a home is a route to increasing your net worth. The forced savings of your monthly payments help you build equity in the property, which you can use for another property or other goals.
Price appreciation: There is no guarantee that your home will gain value, but that is what happens in many cases—over the long term. Real estate can help hedge against inflation, assuming your property keeps pace with rising prices.
Reasons for Waiting
If you’re not feeling rushed, that’s okay. Waiting can pay off in several ways. Making a home your own and moving can be a pain, so you may prefer to minimise the number of times you buy and sell.
More certainty: As you get older, you develop a clearer picture of your ideal home. The future is always uncertain, but you gain more information about several factors as you age:
- Your work location, or your ability to work remotely;
- Your income available for housing payments;
- The size of your family, if any;
- Financial strength.
Instead of being house poor and dealing with your property in your 20s and 30s, you can spend those years saving for a significant down payment, travelling, or doing anything else you want. What’s more, you can build credit over the years to get the best loan possible.
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