Buying a home can be beneficial for anyone who can afford to do so. However, research says that California residents and others should aim to buy a home by age 34. This enables an individual to have maximum equity in the property when that person is in his or her 60s. On average, a person who bought a house between ages 25 and 34 had $148,625 in total equity by their 60s.
Interestingly, the research from the Urban Institute found that those who bought before age 25 only had $130,000 in equity. This is because the homes that they purchased were generally less expensive, which meant that the homes generally appreciated less over time. As a person gets older, it becomes more important to have financial resources such as the equity in a home. If necessary, it can be used to cover unexpected expenses or make up for a lack of retirement savings.
It is important to acknowledge that there are barriers to home ownership that young people face. For example, they may be trying to pay off student loan or other debt accumulated earlier in life. They may also be trying to contend with rising home prices and mortgage interest rates. According to the Urban Institute report, fewer people in their 20s own homes compared to a generation ago.
Individuals who are buying a residential property are generally making an investment in themselves today and tomorrow. A home has the ability to appreciate in value, which makes it a powerful asset for a person as he or she ages. Anyone who is going through the buying process may find it easier to do so with the help of an attorney. Legal counsel may be able to review the terms of a purchase agreement before it is legally binding.