Homeownership

^{The Weekly Habit}

^{The #1 activity for retiree’s is watching TV. Only 37 (~25%) responders selected the correct answer. One commented “It’s going to be video games and virtual reality by the time I’m 70.” I don’t disagree.}

^{Real Estate}

Unlike the rest of the world, Americans disproportionally value owning over renting, and homeownership is viewed as a critical piece of “the American dream.”

Data Nuggets

Trivia Answer: 41.6%

An overhwelming majority of Americans “believe owning a home is a greater achievement than raising a family, getting a college degree, or having a career.”

• The “typical” recently purchased home is 1,800 square feet with three bedrooms and two bathrooms, and dates from 1986.

• 66% of U.S citizens own a home as of 1Q23.

• The average age of first time home buyers is 36.

• 33% of homeowners would NOT buy (their current home) if they had to do it all over again.

• Home values apprecaited 80% between 2015 - 2023 according to Black Knight’s Home Price Index.

• 12% of non-homeowners don’t want to ever own under any circumstance.

• Majority of buyers purchased at 100% asking, but 28% went above asking price.

For perspective, the homeownership rate in Germany is <50%.

Costs to Consider

With U.S. home prices up over 40% since January 2020, saving for a home is harder than it’s been in decades.

Downpayment

Typically, need 20% to avoid PMI, but many first time homebuyers can get away with as little as 3.5% if you qualify for an FHA loan.

Closing Costs

They range between 2% - 5% of the total purchase price. These include loan origination fee, appraisal fee, title insurance, inspection fee, credit report fee….I’ll just stop there.

Ongoing Expenses

Loan’s principal & interest, homeowner’s insurance, property taxes, maintenance & repair, utilities, HOA fees, etc.

My Favorite Guide

Check out this How To Save For A House Guide.

Buying vs. Renting

It’s a lifestyle decision.

Rent is the maximum you’ll pay when buying is the minimum.

My Key Takeaway

Don’t buy a home just to check a box. Ask questions, get the specifics, and make a plan. If you don’t have one, talk to your financial advisor.

Don’t have a financial advisor? Find yours at Habits!

Thanks for reading, Habits fam. See you back here next week for more.

-JB

Got feedback? Hit reply and tell me what you think…I’m always looking to level up.