Should Boomers Buy or Rent After Selling?
According to a recent CNBC article, it was reported that many baby boomers are selling their current homes and moving into rentals, rather than purchasing another home. They cite data from a recent Census report, “Between 2009 and 2015, the number of renters aged 55 or above rose 28 percent, while those aged 34 or younger only increased 3 percent.”
Meanwhile, more than 5 million baby boomers across the nation are expected to rent their next home by 2020, according to a 2016 analysis from Freddie Mac. Some boomers want to stay close to the neighborhoods they have lived in for decades; others are following their children, the millennials, to cities, experts said.
This makes sense in the short term for many reasons. If you are moving to a different part of town or a new region of the country, you may decide to rent until you pick the perfect home in an area you love. Also, many boomers desire a carefree lifestyle of having no home maintenance responsibilities. However, is renting a good long-term strategy?
A mortgage payment remains fixed. Rents, however do not. The Census Bureau recently released their 2017 third quarter median rent numbers. The report shows that the median rent amount has more than doubled since 1995. Rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether you should rent or buy your next home, you should take this statistic into consideration.
One way to protect yourself from rising rents is to lock in your housing expense by buying a home instead of renting. A townhome purchase still offers a carefree lifestyle as most have Homeowner Associations that take care of outdoor maintenance, including lawn care and snow removal. Meet with a Paula & Co. team member who can help you decide what the next best step is for you and your family.