Not everyone is ready to buy a home. But if you are ready, it's one of the best investments you can make. This is especially true for younger people (the Millennial generation), who arguably have the most to gain from buying a house.
Millennials make up the largest group of first-time homeowners in America, and many in their 30's and even in their 20's are coming around to the benefits of buying their first home. Unfortunately, many factors are keeping Millennials from becoming homeowners — student debt, a volatile job market — but the numbers are improving. Here are four benefits of buying a home while you are young:
- Spend money smarter. Making monthly payments on an apartment you'll never own can be frustrating, and escaping from the cycle of renting is one of the biggest reasons many Millennials give for wanting to own a home. Putting your money toward mortgage payments instead of rent gives you something to work toward. Many young homeowners find that the responsibilities of homeownership lead to developing better financial habits in general.
- Invest in your future. If you're like many people, a house is probably the most valuable thing you will ever own, but it's more than that. Most real estate increases in value over time, and buying a home at a young age gives you something of great value that you can sell when the time is right — probably for a higher price than you paid for it. Granted, property values can go up and down as the market fluctuates, but if you make a wise choice in the home you choose to invest in, it is unlikely that its value will decrease in the long run. Chances are, when you reach retirement age, you'll be glad you bought a house when you were younger.
- Build your credit. It goes without saying that if you're buying a home at a young age, you're probably already working with some credit. That being said, buying a house looks good to lenders, and the fact that you're able to achieve it at a younger age than most will only make your credit history look more impressive. Even if you're buying a relatively modest starter home, obtaining a mortgage and paying it off reliably will boost your credit rating and make it easier to buy a larger home in the future.
- Enjoy the tax benefits. Many new homeowners are pleasantly surprised by all the tax advantages that come with buying a house. For starters, mortgage interest is deductible from your annual income tax, and homeowners get tax credits that can lower their tax liability. Simply put, owning your home means that you may owe less to the government when tax time rolls around.
When it comes to buying a home, age is just a number, of course, and the right time to become a homeowner is when you're ready. Ask your agent for additional tips when shopping for homes.