When people talk about housing today, the conversation almost always centers around affordability. Home prices have increased, mortgage rates are higher than they were a few years ago, and many young adults believe they should wait until they can afford their "forever home."
But what if the biggest problem isn't affordability?
What if it's waiting too long to become a homeowner?
According to recent housing trends, the average age of a first-time homebuyer has increased by approximately eight years over the past decade. That's a significant shift, and it comes with a hidden cost that many people don't realize.
Consider this...
A modest $200,000 home appreciating at the historical average of 3.75% per year (which includes the housing crash and excludes the unusually high appreciation seen in recent years) would gain roughly $89,000 in value over eight years.
That's nearly $90,000 in equity simply from appreciation.
Add to that the principal paid down through monthly mortgage payments, and many homeowners could build well over $100,000 in wealth during those same eight years.
That's equity that renters simply don't have.
Buy Something... Anything.
One of the best pieces of advice for young adults is to buy something—not necessarily their dream home, but a home that gets them started.
When you're in your early 20s, you're often more flexible. You're accustomed to living on a tighter budget, your housing needs are simpler, and you're in a great position to begin building equity.
The mistake many people make is waiting until their late 30s—or even early 40s—to buy their first home.
By then, life looks very different.
Maybe you're married. Maybe you have children. You may want more bedrooms, a better school district, a larger yard, or a shorter commute. Naturally, those needs point toward a more expensive home.
Yes, affordability becomes a challenge—but much of that challenge could have been avoided by starting earlier.
The Power of a Starter Home
Imagine two buyers at age 35.
One waited until now to purchase their first home.
The other bought a modest starter home in their mid-20s.
The second buyer may now have $90,000 or more in appreciation, plus another $40,000 or more in principal reduction, giving them well over $100,000 in equity to apply toward their next home.
Who do you think has an easier time buying the home that fits their family's needs?
For many homeowners, that equity becomes the bridge that makes the next purchase much more affordable.
A Message for Parents
If you have children who are approaching adulthood, encourage them to consider homeownership sooner rather than later.
Their first home doesn't have to be perfect.
It doesn't have to be forever.
It simply needs to be a starting point.
Real estate has long been one of the most effective ways to build wealth over time. The earlier someone starts, the more time they have to let appreciation, equity, and principal reduction work in their favor.
Waiting for the "perfect time" often ends up being the most expensive decision of all.
Want to Learn More?
Jay Atterstrom
📧 [email protected]
📞 (214) 377-0033