Are you a baby boomer who’s lived in your current house for a long time, and you’re ready for a change? If you’re considering selling your house, you have much to consider. Will you move to a different state or stay nearby? Is it time to downsize, or do you want more space to accommodate your loved ones? But maybe the biggest consideration is whether you will buy your next home or choose to rent instead.
That decision ultimately depends on your current situation and your future plans. Here are two important factors to help you decide what’s right for you.
Expect Rents to Keep Going Up
The graph below uses data from the Census to show how rents have been climbing steadily since 1988:
Rents have been going up consistently over the long run. If you choose to rent, there’s a risk your rental payment will go up each time you renew your lease. You may not want to deal with a higher rental expense every year.
When you buy a home with a fixed-rate mortgage, it helps stabilize your monthly housing payment. This allows you to lock in your monthly payment for the duration of your home loan. That keeps your payments steady and predictable for the long haul. Freddie Mac sums it up like this:
“. . . 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.”
Owning Your Home Comes with Unique Benefits
According to AARP, buying your next home is a better long-term strategy than renting:
“Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”
To help you choose what you’ll do after you sell, here are just a few of the benefits of homeownership that the article covers:
- Owning your home can help you save money for the future. Your home, and the equity you build as a homeowner, can provide generational wealth that could be passed on to loved ones, giving them a better life.
- You might not have to pay a monthly mortgage payment at all. You won't have a monthly mortgage payment if you have enough equity to buy your next home outright. While you might still need to cover property taxes or maintenance fees, not having to worry about a monthly mortgage payment could be a big relief.
- Aging in place can be simpler. If your needs change, owning your home allows you to make renovations and updates that make everyday life easier.
Bottom Line
Let's connect if you're a baby boomer wondering whether you should buy or rent your next home. With rents increasing and homeownership providing so many benefits, it may make sense to consider buying your next home.
