Final 3 Down Payment Program Myths Debunked
You may not be thinking about how homeownership can benefit you decades from now, but you should. A new study from the Urban Institute finds that the younger you buy a home, the wealthier you will be by the time you are 60 years old.
How much of a difference would it make to wait another 10 years before buying? Every year you put off buying your first house could cost you thousands of dollars in lost equity by the time you turn 60. In fact, there is a $72,000 difference in the median housing wealth of those who bought their first home between ages 25 and 34 and those who waited until they were 35 to 44.
Homeowners who bought their first home before they reach 34 are financially better off in their sixties — proving that the housing choices you make today could have long-term economic consequences in the future. The graphic below shows that those who bought a home before age 25 got the biggest bang for their housing buck.
“Deferring home purchases could have long-term economic consequences for millennials and the nation’s economic well-being,” concluded the study’s authors, Jung Hyung Choi and Laurie Goodman.
The Millennial homeownership rate is about 38 percent, just over half the national rate and about eight percentage points lower than that of the two previous generations (Gen X and Baby boomers) at the same age. Today’s older adults became homeowners at a younger age than today’s young adults — and they are reaping those benefits today.
But nearly half of Millennials have yet to save a dime for a down payment and nearly two-thirds will have to save two decades or more to afford a 20 percent down payment. Only by taking advantage of the low-down payment options available today will most Millennials and Generation Zers have a chance to realize the wealth effect of buying young.
Find out what types of homeownership programs may help you get in a home sooner than you thought possible.
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