Although the age of the average first-time homebuyer is 33, more and more people aged 40 and up are deciding it’s the right time to jump into the real estate market. Whether you’re curious about joining their ranks or you think 40 is too old to take on a mortgage, let’s dive into what you need to know.
For starters, it’s important to note that 40 is far from too old for a first-time homebuyer. In fact, according to the National Association of Realtors, the overall share of buyers 45 and older has grown almost 30% since 2013. The NAR also found that in the first quarter of 2020, Millennial buyers accounted for 34% of buyers, Gen Xers accounted for 35%, Baby Boomers accounted for 25%, and the Silent Generation made up 6%. This data indicates that there is no one “right” age to purchase a home—instead, it’s about finding the right fit for your financial situation and lifestyle.
For those in their 40s who are considering jumping into the real estate market, there are a few key considerations to keep in mind. Firstly, it’s important to understand your finances. Make sure you have a good handle on your credit score, debt-to-income ratio, and budget to identify the right loan type and determine how much you’ll be able to borrow. You should also remember to factor in associated costs such as closing fees, appraisal fees, and other additional expenses.
Next, start narrowing down your search for a home. Where do you want to live? What features do you need? Do your dreams match your budget? Taking the time to answer these questions can help you narrow down which properties to consider. Additionally, if you’re able, many first-time homebuyers are able to get assistance from family members, either in the form of gifts or a small loan, to cover part or all of their down payment.
Finally, it’s a good idea to know your rights as a buyer. Federal and state regulations protect consumer rights to ensure that lenders and brokers act ethically and fairly—so don’t hesitate to research the applicable laws for your area before you make any decisions.
In conclusion, deciding whether or not to purchase a home in your 40s is a deeply personal decision. Everyone’s situation is different; however, if you’ve weighed the pros and cons and have decided that now is the time for you to become a homeowner, then there’s no reason to wait any longer. It is possible to purchase a home in your 40s—it just requires doing some research to make sure all the pieces fall into place.
Age 40 may seem late on the timeline to purchase a home for the first time, but many people in this age bracket are taking the plunge. Although the average first-time homebuyer is 33, according to the National Association of Realtors the overall share of buyers 45 and older has grown nearly 30% since 2013. Buying a home in your 40s requires doing research to make sure it's the right financial and lifestyle move for you. To get started, first evaluate your credit score, debt-to-income ratio and budget to identify the right loan type and amount you'll be able to borrow. Secondly, narrow down your search to homes that meet your desired features and budget. Lastly, make sure you know your rights as a consumer and investigate applicable laws in your area. Purchasing a home in your 40s is doable if it's the right fit for you. Take the time to identify the right lender, work out the finances and research the market to find the right house and neighborhood to call home.
This article was contributed on Nov 30, 2023
