What Happens if You Buy Your First Home Before Middle Age? | Topouzis & Associates, P.C.


February 26, 2019

What Happens if You Buy Your First Home Before Middle Age?

What Happens if You Buy Your First Home Before Middle Age?

The benefits of homeownership are legion—and its greatest payoffs accrue to those who act soonest in life to become a homeowner. This is the upshot of a recent report by the Urban Institute drawing on research from the Panel Study of Income Dynamics, which has tracked the financial status of particular Americans since 1968, focusing on people who turned 60 between 2003 and 2015. It turns out that those who act before middle age to purchase their first home—even if they are lower income individuals with less education who wind up purchasing lower value homes—end up with more home wealth and less home debt when they reach their golden years than do those who wait.

Indeed, the data set revealed that when members of this set purchased a home between 25 years of age and 34, they had a median home equity in the range of $150,000 when they reached 60 years old. When people waited until they were around 44 years old to buy their first home, the median difference in housing wealth was around $75,000. If they waited until 45 years old or older, that difference rose to $100,000–putting this last set’s median housing wealth at about $50,000.

Interestingly, those who bought their first homes prior to turning 25 years old—an admittedly small set, relatively speaking—had home equity in the median range of $130,000 by the time they reached 60; this despite being the least educated of the bunch and most likely to work low-paying, blue-collar jobs. Granted, their median house value is lowest of the bunch, but so is the amount of debt they still owe—their median remaining principal at age 60 falls in the range of $11,000.

For Millennials, who to this point have been entering the housing market at later average ages than their predecessors—and especially later than those represented in this data set—this trend may have profound ramifications for the remainder of their lives.

Title defects can occur in any property transaction, no matter what the age of the buyer. We at Topouzis & Associates, P.C. are experts at ferreting them out and disposing with them in advance of closing. We take pride in the great amount and quality of experience we bring to the closing table in Rhode Island, Massachusetts, and Florida. Contact us if you want a partner in your property closing—one who makes everyone involved feel like family.