Should Baby Boomers Buy or Rent After Selling Their Homes?

Are you a baby boomer who’s lived in your current house for a long time? Have you finally concluded that it’s just too big? Are you paying everyone from landscapers to painters and plumbers to take care of it?

If you’ve decided that it’s time to sell your house, you have a lot to consider. Will you move to a different state or stay nearby? Is it time to totally downsize or do you still need extra space for a home office or an older relative?

Maybe the biggest consideration is this – will you buy your next home or choose to rent?

That decision ultimately depends on your current situation and your future plans. Here are two important factors to help you decide what’s right for you.

Expect Rents to Keep Going Up

The graph below uses data from the Census to show how rents have been climbing steadily since 1988. If you choose to rent, there’s a risk your rental payment will go up each time you renew your lease. Having a higher rental expense may not be something you want to deal with every year, particularly as you get older and depend on more of a fixed income.

When you buy a home with a fixed-rate mortgage, it helps stabilize your monthly housing payment.This allows you to lock in your monthly payment for the duration of your home loan. That keeps your payments steady and predictable for the long haul. 

Freddie Mac sums it up like this: “…homeowners with fixed-rate loans will see little or no change to their monthly housing cost over the life of their loan.”

Owning Your Home Comes with Unique Benefits

AARP says that buying your next home is a better long-term strategy than renting. “Though each option has pros and cons, buying provides more pros with a broader range of benefits,” according to AARP.

To help you choose what you’ll do after you sell, here are just a few of the benefits of homeownership that AARP cites:

Owning your home can help you save money for the future. Your home, and the equity you build as a homeowner, can provide generational wealth that could be passed on to loved ones, giving them a better life.

You might not have to pay a monthly mortgage payment at all. If you have enough equity to buy your next home outright, you wouldn’t have a monthly mortgage payment. While you might still need to cover property taxes or maintenance fees, not having to worry about a monthly mortgage payment could be a big relief.

Aging in place can be simpler. If your needs change, owning your home gives you the freedom to make renovations and updates that can make everyday life easier.

Bottom Line

We understand. This isn’t an easy decision. We’re baby boomers, too. Moving from our home of 28 years where we raised our daughter, helped raise our granddaughter and have so many memories was not easy. But we finally concluded last year that the house was just too big and we were venmoing too many people for the work we used to do.

But Mari probably put it best when she said that we should move while it was an option, not because we had to.

Need to talk this through with someone who’s wrestled with the same decision? Please contact us at 508-360-5664 or [email protected]. We’re happy to listen and share our experiences.

Talk soon…

Mari and Hank