Spring into Homeownership

This article includes links which we may receive compensation for if you click, at no cost to you.

While it’s still a little cold in Chicago, it’s bound to get warmer sometime right? But the weather isn’t the only change that takes place in early Spring. As my fellow Chicagoans know (and maybe dread!), the majority of the city’s leases end in April and moving week madness begins. This year, instead of fighting with the crowds, try springing into homeownership and making those hectic move out dates a thing of the past.

To Rent or To Buy

The rent vs. buy debate has been carried on for generations and I’ve written about it extensively. While buying a home is not a decision that’s made lightly, the benefits of buying your own home often far outweigh the benefits of renting.

According to a recent survey conducted on behalf of Fannie Mae*, 42% of millennials believe the biggest benefit to homeownership is being able to make their living space their own without the restrictions of a rental. If you’ve ever rented a home before, you’re aware of the downside of living by a set of rules from your landlord. Whether it’s a no-pets-allowed policy or being forced to keep the 70s shag carpet, these rules detract from truly making a house your home. When you own a home, you have the freedom to create a space that suits you, and you can do whatever you want whenever you want! And hands down the best part is you can’t get kicked out when your landlord decides they want to double the rent (this happened to one of my friends recently even though he’d been a good tenant for the past 5 years!).

The same survey shows that 25% of millennials want to buy a home because they want to put money towards something they own and will someday sell. When you’re making monthly rent payments, you’re essentially investing in your landlord’s future instead of your own. You’re making your landlord rich instead of yourself! Mortgage payments are an investment in your own future. Owning a home is an investment because when you’re ready to eventually sell your house you’ll ideally make back the money you spent and then some! Not only are you spending money on something that could give you potential returns but you’re getting many additional perks, like the mortgage interest tax deduction, that you can’t get renting.

Mortgage Accessibility

If homeownership is so preferable to renting, then why don’t more millennials buy a home? Well according to the survey results, 54% of millennials who rent feel that they’re not financially stable enough to afford a home. Luckily, this is often a misconception. Mortgages have become increasingly accessible for people in all financial situations and are turning out to be a smart investment decision for many. One of the main reasons for not feeling financially stable is outstanding debt. In most circumstances the debt millennials are facing comes from student loans. Lenders have now created programs that offer mortgages specifically for potential homebuyers with student debt.

The other main road block for many is a mortgage down payment. Survey results also show that 83% of millennials believe the down payment on a mortgage is more than 3%. This is another misconception that should not stand in your way of buying a home. Lenders are now offering programs that require a down payment of as little as 3%. These programs also offer flexibility in where this down payment money comes from. Whether you’re paying rent or paying a mortgage, a monthly bill is inevitable. The upside is that owning your own home offers flexibility and freedom that renting does not.

Spring in Chicago

So the Cubs are back at Wrigley, music shows are almost back in Millennium Park, and you can almost taste that first hotdog of street festival season. The Chicago housing market is also still an incredible investment, with many neighborhoods selling at record prices and forecasted to increase in value over the next several years.

If you are currently renting, getting ready to renew your lease, or are ready to start hunting for a new one, it’s time for you to see if it makes better financial sense to buy instead of rent. Take a second to step back and learn about your lower down payment options – you won’t regret it.

* Survey data in this blog post has been sourced from a November 2017 survey among 1,008 U.S. adults ages 18-36. This unpublished survey was conducted in the United States by ORC International on behalf of Fannie Mae.

Leave a Reply

Your email address will not be published. Required fields are marked *

Read Comments

  • Comment Author image blank George says:

    Great post, as always! Getting into your first house can be such a huge step in the right direction financially, both literally and mentally. I think that even starting to save for your first house and plan all of the finances involved is an important step on the way to wealth in general.

    Thanks for always putting out great content,

  • Comment Author image blank Greenbacks Magnet says:

    I have read that your not even in the game of playing wealth until you own. Whether this be a home, business, stocks, or anything of value. You don’t have to start with tens of thousands of dollars. Small sums can start you on the path. The point is just to start working towards your goals. Studies show 90% of millionaires invest in real estate. So, if you have the opportunity to buy and are ready to be a homeowner I say go for it.


  • Comment Author image blank Troy Bombardia @ Bull Markets says:

    My friend was doing an exercise, and because here in Sydney house prices are so expensive, it would take him 10 years just to save up enough money for a downpayment!

  • Comment Author image blank Dave @ Let's Automate Your Money says:

    Great post! I understand there are some situations where renting makes sense, but as your article shows there are so many reasons that home ownership makes more sense than renting. I owned rental properties for years and I was building equity while my tenants were not. Long-term home ownership is a great financial move.

In This Article