Young American home buyers are becoming more cautious, since over 60% have experienced buyer’s remorse. This is largely because they are already struggling to save for a deposit, and are left unprepared for the full cost of owning and maintaining a property.
Unfortunately, the rising cost of rent and stagnant wages is pushing them to buy before they are financially ready for the responsibility. Traditionally, property is viewed as a sound investment, but where affordable housing is lacking, buyers are beginning to be more prudent before making a commitment. They are investing more in the responsibilities of ownership, and are hoping to enjoy profitable equity in the future like their baby boomer parents.
Settle Down And Cash In
The housing market across the States is still fluctuating, but in some areas, house prices are increasing considerably. In Idaho, home values increased by over 17% last year, putting it in first place in the country for house price rises. This may make it harder for those buyers who want to climb the property ladder.
However, those who choose to stay put will benefit from the increase in value in their homes. For older homeowners, this gives them the chance to release more equity from their homes. Having spent years investing time and money in their properties, their home could now provide valuable income for them during their retirement.
Rent Before Buying
Although most Americans prefer to own their own home, due to low growth and a lack of affordable homes, 15% of potential homeowners view renting as an easier option. Government programs can help people on a low income find affordable rental housing and, in some areas, property owners are subsidized for providing lower rents to eligible people. For younger buyers, lower rents could mean that they are still able to save for a home of their own in the future.
Stay Home And Save
Unfortunately, many millennials still struggle to save even if their rents are subsidized, and over 20% of young people between the ages of 23 and 37 are living at home with their parents. Along with higher rents, they list unaffordable housing and stagnant wages as obstacles to getting on the property ladder. Staying at home enables them to save more of their income. This means they can avoid buyer’s remorse by putting down a substantial deposit on a home of their own, as well as save money towards its running costs.
Buying property will always be a popular choice for investment. However, when prices are increasingly out of step with wages, young people are having to wait longer for the chance to get on the property ladder. Saving for a substantial deposit and running costs will ensure they can comfortably keep up with payments and enjoy their new home. For older homeowners, deciding to stay put rather than stretch themselves further is also proving to be profitable.