Did you know that less than half of all millennials own homes?
Millennials get a lot of flak, whether it’s for being lazy or entitled. But the data is clear: few millennials attempt to purchase a home compared to previous generations at the same age. While there are sound economic reasons why they’re against the prospect, there are many reasons in favor.
You’re not alone if you’re asking yourself, “Should I buy a house?” We’re in the midst of rampant inflation and a housing crisis. So rather than give you a clear-cut answer, we’ll give you the facts and let you decide.
Keep reading as we discuss the pros and cons of buying a house.
Should I Buy a House? The Pros
The housing market has remained a valuable epicenter for our economy. Whether you live in the house or not, there are good reasons to have one.
Let’s discuss just a few of the reasons you should get into the housing game now.
It Strengthens Your Home Equity
Chances are, your first home won’t be your last. The little ones will need more space, and you’ll experience pay bumps in your employment status. You’ll want to upgrade to a better home in a better neighborhood.
However, this will be a lot harder without some home equity. Home equity is the rough percentage of a property that is “yours.” The more of your mortgage that you pay down, the more equity you have.
This equity can be used to sell your home for an upgrade. It will make it easier to get credit, too, like self employed home loans.
A Better Living Space
Let’s face it, renting sucks. You’re at the mercy of a landlord that can evict you at a moment’s notice. They can hike rent prices year after year without making any of the changes you request.
Renting often forces you to live in cramped complexes with loud, unsavory people. You have no control over renovations or major design changes. All of that goes away when you own a home.
A Valuable Asset
People always need places to live. Even after the housing crash, real estate was in short supply and high demand. People need a place to sleep no matter what the economy is like.
While your home may lose its value after a crash, it will be an asset you can always sell. You can wait until the market recovers, wait for a bubble, and sell your home for much, much more.
Build Your Credit Score
You can build your credit score in a number of ways. Paying off your credit cards and making loan payments on time are two good ways, but these can only take you so far. The next big step is to build your credit with a home.
Paying for a mortgage will give you a robust credit score. This will make it easier for you to obtain loans and pursue other forms of credit. Financial decisions may be easier with stronger credit.
Lavish in Tax Benefits
The Fed incentivizes home ownership, and one of the ways they do this is with a tax deduction. This is meant to help you keep up on your feet long enough to remain in a home.
If you want the biggest tax write-off to offset your purchase, then purchasing a home will be a much smaller burden.
Homes may be great assets for the reasons above, but no rose is without its thorns. Homes are a massive investment that incur a lot of financial risks. It’s no wonder that many people went bankrupt during the 2008 economic crash.
Let’s discuss some of the reasons why you should probably not buy a house in this market.
Houses Are a Massive Expense
Above we lamented how inconvenient renting is, but at least we can say that renting is the more affordable option. Financing a home is very, very, very expensive. You will have to take out a mortgage, one which you may have to pay off for decades to come.
This financial strain may push your budget to its limits. If you’re not prepared, you may have to sell the home or declare bankruptcy. Many millennials simply do not have the finances to make this sort of leap.
This is exacerbated by the fact that it’s hard to find a new home. Developers are not building housing fast enough for our society’s needs.
You Are Responsible
Renting also adds one important benefit: you’re off the hook for maintenance and repairs. If something breaks, you just call your landlord to handle it. These maintenance repairs can be quite expensive, costing you thousands of dollars during your residence in the home.
The same goes for any neighbors you have or any property taxes you owe. All things concerning your home concern you. As a renter, you might just ignore these issues or turn them over to your landlord.
It’s a Semi-Permanent Arrangement
You can sell a home at any time, even after owning it for a period of just a couple of years. But unlike an apartment, there’s a lot of work for the move-out.
You need to sign all the paperwork and sell it off to a new owner. It’s a lot more time and stress compared to if you’d just moved out of a rented apartment.
Owning a home is ideal if you plan to stay in an area long-term. This won’t be like a lease that runs out after a year.
Make the Right Housing Arrangement for You
You asked, “Should I buy a house?” and now you have all the information you need. Buying a house gives you more freedom over your home’s design, strengthens your credit, and frees you from bad neighbors. However, it’s a heavy financial burden that leaves you locked into a property you may soon dislike.
At the end of the day, the decision is yours and will depend on your individual circumstances. But we trust you’ll make the right decision!
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