Buying a home is one of the biggest purchases you'll probably ever make. You have to come up with a down payment, make sure your credit is pristine enough to get a decent interest rate on your mortgage, and make room in your budget for moving costs. There's a lot involved, so you're not taking the decision lightly. Right?
Well, the latest spring home shoppers report from Realtor.com seems to indicate otherwise — especially in the case of millennial home buyers. According to the report, 46% of 25-to-34 year olds actively shopping for a new house are doing so simply because they're tired of their current digs.
To be fair, that's the No. 1 overall reason that home shoppers gave for their house hunting, but the stats for millennials were highest than in any other age group (the average across all age ranges was 35%).
The No. 2 reason millennials are house hunting? Because they are planning to grow their families (30%), followed by getting married or moving in with a partner (27%), and a tie between a change in family circumstances and seeing a boost in pay (24%). Unlike other age ranges, most millennials aren't looking for a single family house. Most are on the hunt for a town house, row house or single-family attached home.
While owning a home is a great goal to shoot for, the Realtor.com study hints that home buyers are being a little too blasé about the decision — which will obviously have a huge impact on your finances.
Think about it: Let's say you're interested in a $250,000 home. If you want to make the recommended 20% down payment, that's $50,000 you'd have to come up with. If your closing costs are 3% of your purchase price, that's another $7,500. So that's $57,500 you'd have to have at the ready even before you weigh in costs for home inspections, taxes, home owner's insurance or paying for movers and new furniture.
Is that a price worth paying just because you're bored with the paint on your brick or want a new floorplan? Not so much. To decide if you're truly ready to buy a home, ask yourself these key questions first.