A recent article in Toronto Life magazine stated that millennials are deciding not to buy homes, instead opting to rent or live with their parents for as long as they can. While they are making enough to afford a decent home, they’d rather spend it on travel and experiences. While the fun life sounds exciting, it does nothing for your future or even your present. Here are five reasons why you should buy a home now.
Pride of Ownership
There is truly nothing like owning your own home. All of our ancestors strived for that elusive dream: owning property, and you should too. Sure, you may have a large mortgage and monthly payments that say it isn’t fully yours yet, but you have to start at some point or you will never get there. Starting young could mean you’ll be mortgage-free by the time you are 45. When you have friends over to entertain, you can be confident and proud in the fact that this is your home. You can leave your socks on the floor (or pick them up), you can paint the walls in neon colours (or subdued greys) and you can play your music as loud as you’d like (or have a nap whenever you please!). Rather than living with your parents or living under a landlord, the choice is yours.
While jet-setting around the world sounds much more appealing than giving yourself more responsibility, you’ll honestly thank yourself for doing it. You’ll become a better person and people will see that. Potential suitors, friends and bosses will look at you in a better light when you tell them you own your own home, especially if you are young. Responsibilities actually give us a reason to live a meaningful life. You’ll make more positive choices (going home to water the garden rather than head out for those after-work drinks).
Now, to the money part of the equation. Starting to pay off a mortgage while you are young ensures you are building capital in yourself. Paying rent builds someone else’s equity. Living with your parents gives you more chances to frivolously spend your earnings. When you pay a mortgage payment every month, it is like a forced savings account for your future.
Low Interest Rates
At present, interest rates are at historic lows. They won’t stay this way forever, but now is the time to lock in on a mortgage and take advantage of them while they are low. This doesn’t mean that you should get a mortgage to the maximum of your budget, because when the rates rise, you want to be able to continue making payments. Instead, you should take advantage of the low rates to make larger payments on principal.
You Will Make Money
The housing market is almost a sure-win, as long as you don’t overextend yourself. If you set yourself up for the long-term, the price of your house will continue to go up and you will make money in the long-term. Sleeping in your childhood bedroom ensures you won’t make anything. But, starting now means you’ll make more money, rather than pay higher prices in future years.
While buying a home can be a scary proposition in 2016 with the market going wild in Canada, it is well-worth it to get yourself in it and be taken along for the very rewarding ride.