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Remember your first tiny shoebox of a home as a young adult? Now picture trying to stuff your current life into that space. It's like attempting to fit an elephant into a phone booth, right?
For the majority of us, our housing requirements are cyclical.1 A newly independent adult may discover freedom and flexibility in a small apartment, while the same space might feel cramped for a growing family. For empty nesters, a large house with several unused bedrooms can become inefficient to heat and maintain. It's no wonder that life changes often lead to buying a new home.
Although your home-buying journey might differ from that of your neighbor or friend, understanding broad trends can help you focus on important considerations during your house hunt. Nobody wants to regret their home purchase, and taking the time now to clearly define your needs can prevent a lot of disappointment in the future.
The Newly Married or Partnered Couple
For centuries, the financial and legal commitment of marriage has served as a foundation for homeownership. However, nowadays, more couples are choosing to buy homes without getting married. Over the past few decades, demographic changes have pushed the median age for first marriages and first home purchases into the late 20s and early 30s, placing most newly married or partnered buyers squarely within the millennial generation.2,3 Regardless of your age, there are important factors to consider when making your first home purchase together.
Affordability is Key
There’s no doubt about it—with high student loan debt and two recessions in the rearview mirror, many millennials feel that the deck is stacked against them when it comes to homeownership. And it’s not just millennials—Americans of all ages are facing both financial challenges and a tough housing market. But stepping onto the property ladder can be more doable than many realize, especially in today’s low mortgage rate environment.
While many buyers are holding out for their dream home, embracing the concept of a starter home can open a lot of doors.4 In fact, that’s the route that most first-time homebuyers take—the average home purchase for a 20-something is about 1,600 square feet. While the average size increases to around 1,900 square feet for buyers in their 30s, it’s not until buyers reach their 40s that the average size passes 2,000 square feet.5
Chosen carefully, a starter home can be a great investment as well as a launchpad for your life together. If you focus on buying a home you can afford now with strong potential for appreciation, you can build equity alongside your savings, positioning you to trade up to a larger home in the future if your needs change.6
Taking Advantage of Low Mortgage Rates
Mortgage rates are currently at historic lows, making it an ideal time to buy your first home together. A lower interest rate can save you tens of thousands of dollars over the duration of your loan, which can significantly enhance the quality of home you can afford.
But what if one or both partners in a couple have poor credit? You may still have options. Improving a credit score can be simpler than you think—just reducing your credit card balances to below 30% of your limit can make a big difference. If that doesn't sufficiently raise your score, you might consider taking out the mortgage in the name of the partner with the better credit score. The drawback is that applying for a mortgage with only one income will lower your qualification amount. If you choose this option, ensure you understand the legal and financial consequences for both parties if the relationship ends.
Commute and Lifestyle Considerations
Whether you've been living in a rental together for years or are moving in for the first time, you understand that cohabitation requires compromises. However, certain home features can simplify future living if you recognize them early. The number of bathrooms, closet space availability, and even the kitchen layout can significantly impact your daily life and relationship.
The location of your home will also greatly affect your quality of life, so it's important to consider it thoughtfully. How will commuting be for each of you? If your interests or hobbies differ—like museums versus hiking—you'll need to find a community that accommodates both. Need assistance in pinpointing the ideal location that fits your budget? We can connect you with excellent neighborhoods that provide the perfect blend of amenities and affordability.
The Growing Family
Having kids changes things—fast. With a couple of rowdy preteens and maybe some pets in the mix, that 1,600 square foot home that felt palatial to two adults suddenly becomes a lot more cramped. Whether you’ve just had your first child or are getting to the point where your kids can’t comfortably share a bedroom any longer, there’s plenty to consider when you’re ready to size up to a home that will fit your growing family.
The Importance of School Districts
For many parents, the desire to give their kids the best education—especially once they are in middle and high school— surpasses even their desire for more breathing room. In fact, 53% of buyers with children under 18 say that school districts are a major factor in their home buying decisions.7 Of course, better funded (and often higher ranking) schools correspond to higher home prices. However, when push comes to shove, many buyers with kids prefer to sacrifice a bit of space to find a home in their desired location.
But when you’re moving to a new community, it can be tough to figure out what the local schools are actually like—and online ratings don't tell the whole story. That’s why talking to a local real estate agent can be a gamechanger. We don’t just work in this community; we know it inside and out.
Lifestyle Considerations
For many families, having ample living space is a top priority. When you have teenagers who want a place to hang out with their friends, a finished basement or a recreational room can be a significant advantage (and can help you maintain some quieter living areas for yourself).
A well-designed layout can greatly simplify family life. For instance, an open floor plan is essential if you wish to prepare dinner while watching your young children play in the living room. Additionally, if you plan to expand your family in the future, ensure that the home you buy has enough bedrooms and bathrooms to accommodate that comfortably.
Functionality
Consider how each room will integrate into your daily routine. Planning to keep the house stocked for hungry teenagers? A pantry might become a priority. Concerned about the laundry loads that come with both infants and older kids, especially if they play sports? A well-designed laundry room can make the task much more manageable. Visualize a typical day or week of household chores to determine which features will have the greatest impact.
It's unlikely you'll find every desirable feature in one home, which is why pinpointing the essentials can greatly aid the decision-making process. We can assist you in evaluating your options and provide a realistic sense of what fits within your budget.
The Empty Nesters
When considering empty nesters, downsizing often comes to mind. With children having left home, additional bedrooms and living areas can quickly become burdensome. While the typical buyer under 55 tends to upgrade to a larger home, those over 55 are more inclined to buy a smaller or similarly sized but more affordable home. Even among the oldest age groups, most home purchases are still single-family homes. Research by the National Association of Realtors shows that by their 70s, buyers typically choose homes with a median size of 1,750 square feet. 5 But there’s plenty for empty nesters to think about besides square footage.
Maintenance and Livability
What reasons are influencing your choice to relocate? Recognizing these early on can assist in refining your search. For instance, do you desire a space for a garden, or would you rather not handle lawn care at all? How about home maintenance? Often, a newer home demands less upkeep than an older one, and a smaller home will require less time to clean. You might also want to explore townhomes, condos, or other living arrangements that require less maintenance.
Lifestyle Considerations
Many empty nesters have retired or are approaching retirement age. This might be your opportunity to finally engage in hobbies and passions that were difficult to fit into a 9-5 schedule. If you’re considering moving, think about how you’d like to spend your days and look for a home that will help make that dream come true. For some, this might mean living near a golf course or a beach. For others, being able to walk downtown for a nice dinner out is the priority. And with more time to spend as you wish, being close to a supportive community of friends and family is invaluable.
Ability to Age in Place
Let’s face it—we can’t escape aging. If you’re looking for a home to retire in, accessibility should be front-of-mind.8
This could involve choosing a single-story house or ensuring there are sufficient spaces on the first floor to rearrange as necessary. Although purchasing a home with the intention of renovating from the beginning is a feasible option, being compelled to undertake renovations (due to aging) a few years later could significantly impact your savings. Location is also important—if your family will be providing support, are they nearby? Can you easily access essentials like grocery stores and healthcare? While it's tempting to avoid thinking about it, making a few thoughtful considerations now can greatly enhance the possibility of staying in your home long-term.
Finding the Right Home for Right Now
One thing is for sure—life never stands still. And your housing needs won’t, either. In the United States, the median duration of homeownership hovers around 13 years.9
This means that many of us will experience living in various types of homes as we transition through different stages of life. At each key point, evaluating your housing options carefully will ensure you are prepared to handle the upcoming changes.
No matter which stage you're entering next, we're here to assist you. Our knowledge of local neighborhoods, pricing, and available homes will help you pinpoint the perfect location and type of home for your needs. We've assisted home buyers at every life stage, so we know the exact questions you should be asking. Purchasing a home—whether it's your first or your fifth—is a significant decision, and we're here to guide you through every step.
We support the Fair Housing Act and equal opportunity housing.
Know someone looking for their next home? Or maybe they need to do a quick 1031 Exchange? Reach out to me today:
Mickie Giacomini, North America Realtor, Mickie.Giacomini@gmail.com
Sources:
Freddie Mac -http://www.freddiemac.com/blog/homeownership/20190104_homebuying_lifecycle.page
PRB -https://www.prb.org/usdata/indicator/marriage-age-women/snapshot/
Nerdwallet -https://www.nerdwallet.com/article/mortgages/starter-home-forever-home
NAR 2020 Home Buyers and Sellers Generational Trends Report -https://cdn.nar.realtor/sites/default/files/documents/2020-generational-trends-report-03-05-2020.pdf
Investopedia -https://www.investopedia.com/personal-finance/what-look-starter-home/
NAR 2019 Moving With Kidshttps://www.nar.realtor/research-and-statistics/research-reports/moving-with-kids
Kaiser Health News -https://khn.org/news/baby-boomers-aging-aging-in-place-retrofit-homes/
National Association of Realtors -https://www.nar.realtor/blogs/economists-outlook/how-long-do-homeowners-stay-in-their-homes#:~:text=As%20of%202018%2C%20the%20median,varies%20from%20area%20to%20area
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