Navigating the Next Phase: Buying vs. Renting for Baby Boomers After Selling Their Homes

Sep 15, 2023 | Blog

Are you a baby boomer who has called your current house “home” for decades and now finds yourself ready for a change? As you contemplate selling your cherished abode, a myriad of considerations weigh on your mind. Will you embark on a cross-country adventure or remain close to your roots? Is it time to simplify your living space or are you seeking a larger haven for family gatherings? Yet, perhaps the most pivotal decision you face revolves around a fundamental question – should you purchase your next dwelling or opt for the convenience of renting?

The choice before you hinges on your current circumstances and future aspirations. Here are two pivotal factors to aid you in making an informed decision tailored to your needs.
Anticipate the Ascension of Rental Costs

The graph below, drawn from Census data, underscores a consistent upward trajectory in rental costs since 1988:

Baby Boomers Housing Transition

 

The upward climb in rental rates over the long term is unmistakable. Opting to rent carries the risk of facing recurring increases each time you renew your lease—an annual financial uncertainty that might not align with your preferences.

Conversely, when you choose to own a home with a fixed-rate mortgage, you gain the advantage of stabilizing your monthly housing payment. This empowers you to secure a locked-in monthly payment for the duration of your home loan, ensuring predictability and stability in your housing expenses. Freddie Mac concisely summarizes this benefit:

“. . . 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.”

Embrace the Unique Advantages of Homeownership

According to insights from AARP, buying your next home stands as a more advantageous long-term strategy compared to renting:

“Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”

To assist you in your decision-making process following the sale of your current home, here are just a few of the benefits of homeownership highlighted in their article:

1. Building Future Savings: Owning your home allows you to accumulate equity that can serve as generational wealth, potentially benefiting your loved ones and securing their future.

2. Freedom from Monthly Mortgage Payments: If you have sufficient equity to purchase your next home outright, you can bid adieu to monthly mortgage payments. While you may still contend with property taxes and maintenance fees, the absence of a monthly mortgage obligation can offer substantial relief.

3. Simplified Aging in Place: As your needs evolve, homeownership affords you the freedom to undertake renovations and updates that enhance the ease of everyday living.

In Conclusion

For baby boomers contemplating the buy-vs-rent conundrum for their next residence, it’s prudent to seek guidance. In a landscape where rents are on an upward trajectory and homeownership confers numerous advantages, it may be judicious to explore the prospect of purchasing your next home. Connect with us today to delve deeper into this pivotal decision and embark on a path that aligns with your unique circumstances and aspirations.

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