For those in the Baby Boomer generation who have long called their current residence home and are now contemplating a change, the decision to sell your house brings forth a multitude of considerations. Will you relocate to another state or remain close to home? Is it time to downsize, or do you yearn for more space to accommodate your loved ones? However, perhaps the most significant decision revolves around whether you should embark on the path of purchasing your next home or opt for the simplicity of renting.

Ultimately, this decision hinges on your present circumstances and your future aspirations. Here, we delve into two crucial factors that can help guide you toward the right choice.

Anticipate Rising Rental Costs

The following chart, utilizing Census data, illustrates the consistent upward trajectory of rental costs since 1988. When you opt for renting, there exists the inherent risk of encountering annual lease renewals that lead to heightened rental expenses, a prospect that might not align with your preferences.

Over time, rental rates have shown a steady upward trend. Opting for renting entails the potential challenge of facing recurrent increases in your rental fees upon each lease renewal. Dealing with a growing rental expense annually might not align with your preferences.

Purchasing a home with a fixed-rate mortgage provides a stabilizing effect on your monthly housing expenditures. It allows you to secure a consistent monthly payment for the entire duration of your mortgage, ensuring a steady and predictable financial commitment over the long term. Freddie Mac succinctly summarizes this advantage: 

“. . . homeowners with fixed-rate loans will see little to no change to their monthly housing cost over the life of their loan. You can be confident in knowing that your mortgage payments won’t change much in the long term, even when life’s other costs do.” 

Ownership Confers Distinct Benefits

As affirmed by AARP, the strategy of purchasing your next residence eclipses renting when evaluating long-term prospects:

“Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”

To facilitate your decision-making following the sale of your current property, here are some of the homeownership benefits that the article expounds upon:

• Savings for the Future: Owning your home, along with the equity you accrue as a homeowner, can generate generational wealth that can be passed down to your loved ones, enhancing their quality of life.
• Freedom from Monthly Mortgage Payments: If you possess sufficient equity to purchase your next home outright, you can eliminate the need for a monthly mortgage payment. While you may still be responsible for property taxes or maintenance fees, the absence of a monthly mortgage obligation can offer substantial relief.
• Simplified Aging in Place: Should your needs evolve, homeownership grants you the freedom to make renovations and updates that can enhance your daily life.

Bottom Line

If you are a baby boomer contemplating the dilemma of whether to pursue homeownership or renting for your next dwelling, do not hesitate to reach out. With the steady ascent of rental prices and the myriad advantages offered by homeownership, exploring the possibility of purchasing your next home may indeed be a prudent choice.