Wondering What To Give Your Adult Children For The Holidays?
Give the Gift of a Lifetime!
If you have adult children or a friend who is renting you may want to share with them the greatest gift they can give to themselves, the gift of home ownership!
While renting has been the common choice for young people in the past, it is becoming alarmingly more and more common. Currently, the median first-home buyer's age is 36. In 1981 the median first-home buyer was 28 (source NAR). Why is this alarming?
Well, home ownership builds wealth and the ability to realize the American dream. Conversely, renting grows your landlord’s wealth. According to KCM, homeowner wealth is 1,469% higher on average compared to renters. Homeownership creates immeasurable lifestyle benefits too.
So why are people delaying home ownership or not buying at all?
Well, many significant challenges exist to home ownership. Most can be solved for and require conversation beyond this blog post. But there are a couple of relatively common and easy ones that we’ve been able to help clients with.
First, there is a common perception that renting is much more affordable than buying. But the truth is you can buy a home and pay close to what you’re paying in rent each month. And if you’re paying a little more monthly for a home vs renting, perhaps you think of it like putting money into an investment account.
Second, is the perception that you need 20% down to buy. Many programs exist where you can buy with as little as 3% down. Even that can be a stretch for some, but that’s where the gift-giving comes in. Over the years we’ve had many clients receive financial support from their parents or relatives, and it has truly been the gift of a lifetime for them.
To illustrate these points, we asked one of our Team Skally preferred lenders Cory Flynn at CrossCountry Mortgage to run the “rent vs buy” analysis for a recent prospective client. The numbers are compelling. Using a similar property being rented in Bellevue and comparing it to a Bellevue townhome on the market, our client would likely gain $150K in personal wealth over the next 5 years by buying instead of continuing to rent. And if they stayed in the home for 10 years it would be closer to a $500K increase in wealth.
See the below analysis for more details or click on this link to see Cory’s 2-minute explanation of the inputs and results.
We have personally experienced the benefits of home ownership and are always happy to assist our first-time home buyers start building their wealth, not their landlords. If you or a family member are renting currently, feel free to call us or Cory. We’d be happy to run the numbers for you.
In the meantime, we wish you the happiest of holidays. And may all your lifestyle dreams come true!
Cheers!
Matt & Christina
Matt & Christina are Team Skally, top real estate agents in the Seattle Metro with expertise in luxury homes on the Eastside including Bellevue, Newcastle, Mercer Island, Renton and Issaquah. Their client testimonials say it all - they deliver exceptional service and record-breaking results. Recognized as top agents on social media by Property Sparks, Diamond Award winners for best client service and regularly featured in online and print publications including Greet - Newcastle & Newport Hills Magazine. In addition to serving clients, Matt and Christina love family time with their two boys and two Goldendoodles as well as volunteering in the community.