You’ve always been told that buying a home is the ultimate achievement — the physical, brick-and-shingles, fenced-in-backyard embodiment of the American Dream. Yet only about one-third (37%) of millennials between the ages of 25 and 34 own homes. And of those who do, 63% reportedly regret their home purchase, with a quarter citing “unexpected maintenance or hidden costs” as the top reason. In more than half (59%) of U.S. housing markets, in fact, it is cheaper to rent than buy.
So what’s the deal? Is it worth plunking down your savings on a piece of property? Or wiser to keep renting for a period of time or until the end of time? The short truth: If you’re able to afford the down payment on a home that is likely to appreciate, and you plan to hang onto the property for at least five years, you should go for it. The long answer is everything below.
1. Should you rent your home or buy one? Let’s run the numbers.
The most important first step in the rent/buy decision is, of course, determining whether you can afford to buy a home, and if so, if you can afford as much of a home as you need. Before going any further, take a look at the following numbers:
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