Should Baby Boomers Buy or Rent After Selling Their Homes?
Are you a baby boomer who has been in your current home for a long time and is ready to make a change? There are numerous factors to consider when selling your home. Will you relocate to another state or remain in your current state? Is it time to downsize, or do you need additional space for your family? But maybe the most important consideration is whether you will buy or rent your next house.
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:Long-term rent increases have been steady. If you choose to rent, your rental payment may increase each time you renew your lease. A greater rental expense may not be something you want to deal with on a yearly basis.
A fixed-rate mortgage helps to stabilize your monthly housing payment when you purchase a property. This allows you to fix your monthly payment for the life of your mortgage. This keeps your payments consistent and predictable over time. 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. If you have enough equity to buy your next home outright, you wouldn’t have a monthly mortgage payment. 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 gives you the freedom to make renovations and updates that can make everyday life easier.
If you're a baby boomer who’s wondering whether you should buy or rent your next home, let’s connect. With rents going up and homeownership providing so many benefits, it may make sense to consider buying your next home.