Should Baby Boomers Buy or Rent After Selling Their Houses?

Are you a baby boomer with deep roots in your current home, feeling the itch for a change? If you're contemplating putting your house on the market, the decisions can be overwhelming. Should you relocate to a new state or stick around? Is it time to downsize or perhaps you're yearning for more space to accommodate your loved ones? Yet, one of the most pivotal decisions you'll make revolves around a fundamental question – will you buy your next home or opt for the rental route?

The answer to this crucial question hinges on your current circumstances and your future plans. Let's delve into two critical factors that can help steer you in the right direction.

Expect Rents to Keep Rising A glance at the graph below, utilizing Census data, illustrates a consistent upward trend in rental prices since 1988. It's a stark reminder that when you choose to rent, you face the risk of seeing your rental payment increase each time you renew your lease. Coping with escalating rental expenses year after year might not align with your financial goals.

In contrast, purchasing a home with a fixed-rate mortgage offers a welcome stability to your monthly housing expenditure. This empowers you to lock in your monthly payment for the duration of your home loan, ensuring predictability over the long term. Freddie Mac succinctly summarizes this advantage:

"Homeowners with fixed-rate loans will see little to no change in their monthly housing cost over the life of their loan. You can be confident that your mortgage payments won't fluctuate significantly in the long run, even when other life expenses do."

Owning Your Home Brings Unique Benefits AARP suggests that buying your next home offers a superior long-term strategy compared to renting. The advantages of homeownership are numerous and far-reaching. Here are just a few highlighted benefits:

• Building Wealth for the Future: Owning your home enables you to accumulate equity, creating generational wealth that can be passed down to your loved ones, affording them a brighter future.

• Freedom from Monthly Mortgage Payments: If you've built up enough equity, purchasing your next home outright can eliminate the need for a monthly mortgage payment. While property taxes and maintenance fees may still be considerations, the relief of not worrying about a monthly mortgage bill can be substantial.

• Simplified Aging in Place: As your needs evolve, homeownership grants you the freedom to undertake renovations and updates that enhance daily living, making aging in place a more straightforward and enjoyable experience.

Bottom Line If you're a baby boomer contemplating the buy-versus-rent conundrum for your next home, it's worth discussing your options. With rental prices on an upward trajectory and homeownership offering a multitude of advantages, the scales may tip in favor of buying your next home. Reach out, and let's explore the best path forward for you.