For over three decades now, 65% of Americans have called themselves homeowners— although that statistic is lower than some of our worldwide neighbors, homeownership has almost been synonymous with “The American Dream”. But with the Millennial generation taking over the spotlight in recent years, there seems to be a shift in the real estate market.
More and more, there seems to be a case for renting instead of buying. Why? Well it comes down to planting roots… for 30 years. Almost any millennial will tell you they have NO idea where they will be in the next 5 years, much less in the next 30 years. So when you start to consider a mortgage, something doesn’t quite compute. With older generations, settling into a home for the long haul was typical— even expected, so at the end of a 30 years, when your mortgage was paid off you came out with a storehouse of equity. But with a growing culture built on “freedom”, a mortgage can seem like a ball and chain.
Now, it is true that homeowners can deduct interest and property taxes, but only if they are itemizing their deductions. That tends to be most beneficial in the early years of homeownership, when the interest portion of mortgage payments is more likely to exceed the standard deduction. That’s also when people are gaining the least amount of equity— So do you see the issue that Millennials face?
So what do you think? What investment would you make? A home? Or “freedom”?