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than two years. That’s a benefit that trumps even a very good IRA or other tax-deferred retirement plan, Via says.
Homeownership has emotional benefits. Homeowners are more likely to be invested in the local community and develop interpersonal relationships that create a reliable support system than those who rent.
“Although it is not a primary benefit for millennial homebuyers, there is also a sense of pride that homeownership invokes,” says Mike Hardwick, president of Tennessee-based Churchill Mortgage. “Through the investment of a home purchase, millennials can play a key role in restoring faith in the American dream and preserving it for decades to come.”
Low interest rates. Borrowing to buy a place to live is seen by banks as a much safer investment than credit cards, and interest rates are still at rock bottom. “It is hard to qualify mortgage debt as a bad financial decision these days,” Via says.
Supplement your retirement income. As millennials contemplate buying homes, Via says they should think about the future. They’ll benefit from having a home as a storehouse for retirement funds, and their homes will likely be paid off by retirement, allowing them to tap into home equity to fund retirement benefits.
This will help millennials supplement their 401(k) and IRA accounts, which will become increasingly more important as the U.S. struggles to fund Social Security, Via says.
There are plenty of benefits to owning a home, but Chris Copley, a regional sales manager for TD Bank in Pennsylvania and New Jersey, urges caution. Buying a home is for millennials who can afford it and who plan to stay in one location for a while, he says.
For prospective, young homeowners, Copley’s best advice is to do research. Talk to loan officers, ask questions and walk through the home-buying process from a financial perspective, he says. “Sit down and do the math. My advice always comes back to doing the homework.”
Crunching numbers is exactly what David Rader, 30, and his wife did before they purchased their first home on Cape Cod in Massachusetts in August. In an effort to make a smart decision, the couple weighed how long they expected to stay in the home, rent potential and their finances.
“We absolutely had reservations,” he says. “We really wanted to be sure we would be here long enough that it made financial sense.”
http://money.usnews.com/money/personal-finance/mutual-funds/articles/2015/09/22/why-buying-a-home-is-a- smart-investment-for-millennials