The largest purchase that many people will ever make is their home. The decision to buy a home is exciting, interesting, and also a little scary. After all, home buying is an enormous commitment, involving tens and sometimes hundreds of thousands of dollars. The decision to purchase a home is somewhat an act of faith, in that the homeowner is investing years of his hard-earned money in the hope that the real estate will at the least hold its value or hopefully increase in value. Paying off a mortgage usually takes between 15 and 30 years of a person’s life, so this choice shouldn’t be made on impulse.
In today’s economy, the big decision of whether to buy a home or to continue renting is puzzling and quite individual. Many people prefer to rent, while others still like the idea of homeownership.
Renting a Home
Statistics on Rentals
If you are currently renting a home, you are in good company. Here are some statistics on renting a place to live, according to the National Multifamily Housing Council
- About 37 percent of the households in the United States are occupied by renters. This represents about 43,267,432 family units comprised of 110,175,847 individuals.
- The largest age demographic for renters is the “under 30” crowd. Over 55 million renters are under age 30, making up about 51 percent of the rental market. However, this number does include a large number of children.
- Most renters live in single-unit places. This 43 percent of the renters studied.
Reasons People Prefer to Rent
In the past, many people preferred to get out of rentals as quickly as possible and achieve the “American Dream” of homeownership. However, in recent years, that trend has shifted a bit. The collapse of the real estate market in many parts of the country makes people a little nervous about gambling on increasing property values. Additionally, uncertain job markets in some sectors mean that the commitment of homeownership is frightening for many families.
Some renters like renting a place to live for other non-financial reasons. Adventurous people may prefer the ability to move, change jobs, and travel frequently, something that might be impossible for a homeowner. Some people don’t want to have to fuss with home maintenance and repairs, and they’re glad to call a landlord when the roof starts leaking or the heat won’t work. Others just don’t want the stress of being forced to make monthly payments no matter what. After all, if the bank account gets a little slim, some people will just move in with friends or family for a few months until they get back on their feet financially.
The Downside of Renting
However, there is a downside of renting. First, renting is often more expensive than home buying in many areas of the country. Second, rent does not gain you any return for your money, and the landlord is the one profiting from your payments. Third, in many places, finding a reasonably-priced, well-maintained rental unit in a nice neighborhood can be difficult. Fourth, homeowners get tax breaks for their housing expenses, and this is something of which renters can’t take advantage.
Buying a Home
Statistics about Home-Ownership
Home ownership is the epitome of the American Dream and is one of the biggest goals of young adults. Here are some statistics on homeownership as according to Money-zine.com. The figures were extrapolated from studies performed by the U.S. Census Bureau and the Bureau of Labor and Statistics.
- The typical American home was built around 1975, has three bedrooms, two bathrooms, is about 1800 square feet and is on a lot that’s about 1/3 of an acre.
- Owning a home costs the typical American about $1450 per month, including taxes, payments, utilities, insurance, maintenance and upkeep.
- The typical American home costs about $160,000.
Reasons People Prefer to Buy
Many people buy a home for no other reason than that they crave the permanence and stability that homeownership brings. Others see their home as an investment, and they want to take advantage of tax breaks available to homeowners. Some homeowners want to buy a house and make it into their own personalized home, customizing it with remodeling and landscaping projects.
The Downsides of Buying a Home
However, homeownership at the wrong time can take the American dream and turn it into a nightmare. If you buy before you qualify for a good loan, you could risk your investment if your payment changes. Also, if your employment situation is uncertain, homeownership might not be such a great idea right now. A few months of unemployment could ruin your credit for years. Additionally, along with homeownership comes the expenses of maintaining the home, something for which the wise homeowner has to plan ahead.
As you can see, the decision of whether to buy a home or to rent one is multi-faceted. There is no one “right” decision. It can depend on several things, such as the homeowner’s age, their job situation, the area where they want to live, their life stage, or their life style. Only you can decide whether you should buy or rent. However, you should think the decision through carefully before you buy a home.
If you’re still on the fence about whether or not homeownership is right for you, you may want to contact a trustworthy real estate agent, such as Fred Franks of Local Realty Service. Fred isn’t necessarily wrapped up in making the sale. More importantly, he wants you to make the best decision for you. He says, ” Purchasing a home can be a long and sometimes tedious process.” Fred continues, “As a professional Central Florida Real Estate Agent, I will assist you in understanding the down payment you will be asked to make, your monthly mortgage payments, your choice of lenders, and so on. Hiring me as your Realtor may be less expensive than you think. In fact it can actually be more expensive NOT to hire a professional to assist you in your home purchase.” Be sure to take your time and talk to a professional before you make this big decision.