Although there is no "correct" age to buy a home, it is important to take stock of where you are in life before making a decision regarding whether or not to do so. A home purchase is the most significant investment that many people make in their lives, and the fact that you are a homeowner can either help or hurt your financial situation depending on how you manage it. Your living situation has an effect on the quality of your life, and this is perhaps the most important factor.
Key Takeaways
- According to the National Association of Realtors, the median age of first-time homebuyers in 2017 was 32 years old.
- When you can comfortably afford the payments, handle any unexpected repairs, and live in the home long enough to cover the costs of buying and selling a home, that is the best age to buy a home.
- To be able to purchase a home legally in most states, you need to be at least 18 years old.
When Should You Make Your Purchase?
As long as the conditions are favourable, investing in a home can potentially be beneficial at any age, regardless of how old you are. It's possible that you're ready to make a purchase when, at the very least, you have:- Can handle the burden of the homeownership's recurring costs, including the monthly payments, without breaking the bank.
- Have a good chance of getting a loan approved (or better yet, pay cash)
- Make sure you plan to keep the property for a period of time that will allow you to recoup the costs associated with buying and selling it, as well as recover from any price drops (that is, assuming prices do recover).
- Can afford the risks, which may include unexpectedly high maintenance costs or a drop in the value of your home due to a weak market.
- Are you prepared to take on the responsibilities that come with home ownership and maintenance?
When do most people make their first purchase?
Even though it's important to lead your own life, it can be helpful to be aware of when other people typically make purchases. It's possible that there are valid reasons behind the fact that homeownership rates go up as people get older. The following table presents the homeownership rates in the late year 2020 according to age, as provided by the United States Census Bureau:| Age Range | Homeownership Rate |
| 35 to 44 years old | 61.0% |
| 45 to 54 years old | 69.8% |
| 55 to 64 years old | 76.0% |
| Age 65 and over | 80.2% |
Motives Behind the Decision to Buy Young
If you want to buy when you're young and have the financial means to do so, getting an early start could provide you with a number of potential benefits that could be beneficial to you.Create a Fortune
If everything goes according to plan, increasing your wealth can be accomplished through the purchase of a home. The "forced savings" that you make through your monthly payments help you build equity in the property, which you can use later in life for the purchase of another property or for any number of other purposes. You "save" a portion of each payment toward your monthly rent rather than handing over the full amount to your landlord as required by the lease.Growth in Costs and Revenues
Even though it is not a given that the value of your home will increase over time, statistics show that this is actually the most common outcome. Assuming the value of your property increases at the same rate as general inflation, real estate can be an effective inflation hedge. Price appreciation has the potential to contribute to your wealth accumulation, particularly in robust markets that offer plenty of opportunities. However, it is best to purchase a house not as an investment but rather as a "home" that you intend to live in.A Space That Is Uniquely Yours
You are the one in charge when you own your own home. You have the ability to make enhancements that increase the property's value, personalise the appearance and layout to reflect your taste, and cultivate deeper roots in the community in which you currently reside. In order to get a return of a security deposit, you do not need permission from the landlord, nor do you need to undo all of the wonderful things that you have done in the apartment. However, what you are allowed to do may be limited by local ordinances and HOA restrictions; therefore, you should investigate any possible restrictions before purchasing a home.Justifications for Holding Out
It is perfectly fine if you do not feel rushed in any way. Putting off a purchase can be profitable in a few different ways. Personalizing a home and moving can be stressful experiences, and in most cases, you have to pay transaction costs whenever you sell a property. TIP: You might find it more convenient to reduce the frequency with which you buy and sell. Time, money, and emotional energy are all required for every transaction.Increased Confidence
As you get older, a more distinct image of your perfect residence emerges in your mind. The future will never be known for certain, but as you get older, you will gain greater insight into several important aspects, including the following:- Your place of employment, as well as whether or not you have the ability to work remotely
- Your available income for making rent or mortgage payments
- The number of members in your family, if you have one.
What it is that you require the most, as well as what it is that you can do without
People tend to make more money as they get older, though this is not always the case. As you get older and your income increases, it becomes much simpler to buy exactly what you want without having to make significant concessions. You don't have to be "house poor" and worry about your property when you're in your 20s and 30s; instead, you can use those years to save up for a sizable down payment, go on trips, or do anything else you want to do. In addition to this, during those years, you have the opportunity to build credit, increasing the likelihood that you will be eligible for the best loan possible.Considerations Regarding Your Neighborhood Markets
Your options may include buying now or waiting until conditions improve. For instance, if your monthly rent is extremely high but the prices to buy are quite reasonable, you might decide to purchase a home sooner rather than later in order to keep your housing costs within a budget-friendly range.The Initial Investment,
It is possible to reduce the amount you pay in interest and monthly payments by making a down payment. If you put down at least 20 per cent of the purchase price, you can lower your risk and avoid having to pay for additional private mortgage insurance (PMI). However, there are loans available that will let you purchase a home with only a modest down payment, making it much simpler to do so at a younger age. Before you seize the opportunity to buy with a very small down payment, it is important to carefully consider the costs and benefits of doing so.Career
Will either your income or location shift as time goes on? For instance, some people who go into the medical field begin their careers with significant debt loads, but they go on to earn high incomes later in life. Determine how the impending shift in your professional life might affect the desirability of purchasing a home. Other professions can range from being fairly secure (for example, working for a university) to being fraught with uncertainty (e.g., a job with a startup).Logistical Issues
When you own a home, the responsibility for everything in it falls squarely on your shoulders. If there is a lawn, you have the option to either cut it, rip it up, or pay someone else to do it for you. If there is a leak, you need to take action to fix it as soon as possible before it causes significant damage. Think about how willing you are to take on those responsibilities. Are you going to do everything yourself (with the assistance of YouTube), or are you going to pay somebody? If you intend to hire someone else to do the work, do you have the necessary funds, and is it simple to locate trustworthy individuals in your region? TIP: After purchasing a home, you will likely discover that you have less free time, and this is true even if you hire contractors to assist you. You will need to find assistance, arrange for estimates, make the property accessible, and complete a number of other tasks.Risk
Purchasing a house can involve a lot of risk. You take on the responsibility of repaying a sizable loan, and there is a risk that you will incur significant losses if you invest in real estate. On the one hand, when you're young, you might be in a better position to take chances, given that you have the rest of your life to make amends for any mistakes you make and that you might not have anyone financially dependent on you. On the other hand, as you get older, it might become simpler for you to deal with the consequences of financial setbacks.When is the Right Time to Buy a House?
In the majority of states, you cannot legally bind yourself until you have reached the age of majority, which is typically 18. The signing of a contract is necessary in both the process of purchasing real estate and obtaining a loan. However, you will need the signature of an adult of legal age in order to legally own property if you are under the age of 18. Get help from local experts who can explain your options and provide guidance on what's best if you're eager to get started early and want to get a head start. You might be able to own property jointly with an adult, or you might be able to have an adult transfer ownership to you through an arrangement known as a trust or a custodial arrangement. There is a possibility that additional choices are available, and an experienced real estate attorney can assist you in evaluating all of the available choices.Questions That Are Typically Asked (FAQs)
Where do you even start when it comes to buying a house?
Determining whether or not you are in a position to pay for a house is typically the first step in the home-buying process. This could involve reviewing your credit history and credit score, as well as taking action to improve your score if it is lower than you would like it to be. Additionally, it means having sufficient funds to make a down payment, your earnest money deposit, and any closing costs that may be incurred. You may also need funds for moving, funds to furnish your home, and funds to cover any repairs or improvements that need to be made as soon as possible. You will want funds for all of these things.What is the typical amount put down when purchasing a home?
According to ATTOM Data Solutions, the median down payment for homes as of the second quarter of 2021 was $25,000. This figure represents 7.4 percent of the median sales price of homes. The rate was 6.1 percent during the first three months of 2021, up from 5 percent during the same period the year before. The median is not the same as the average because it represents the amount that is exactly in the middle of all of the down payments that have been made. Only fifty percent of all down payments were greater than 7.4 percent, while the other fifty percent were lower.