Financial advisors warn against buying a home near retirement — renting beats owning in 27 of 50 largest U.S. metros
Financial advisors warn against buying a home near retirement — renting beats owning in 27 of 50 largest U.S. metros.
Around 66% of adults owned a home (1) in 2024. Census data also tells us that homeowners tend to be wealthier (2) than renters.
A shocking 89% of Americans (3) even believe homeownership to be either essential or important to achieving their vision of their future. So, it's not a surprise that many people purchase properties as they age and earn the money to do so.
Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one
Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here's what it is and 3 simple steps to fix it ASAP
Millionaires under 43 hold only 25% of their wealth in stocks. Here's where their money is actually going
Let's pretend, for example, that Samantha and Ryan are in their 60s and are planning to retire in two years. They've been renting a house for a while, and they want to continue doing so as they're enjoying having no maintenance expenses and don't want to go back to dealing with the headache of unexpected repairs.
However, Samantha and Ryan are feeling a ton of pressure to purchase a home, as everyone they talk to says they should own a property so they don't have to worry about rent in retirement. Is this good advice, though? Financial experts don't necessarily think so, and there are a few reasons why.
The first big factor to think about is that rental costs may actually be lower than the cost of ownership.
Renting is cheaper than owning a home (4)in 27 of the 50 largest U.S. metro areas in 2026, and both mortgage rates (5) and home prices (6) remain high, making finding an affordable home anywhere more challenging.
"When it comes to renting versus buying a home in retirement, you must be willing to look at the facts – income versus debt," Cynthia Campos Delgado (7), founder and financial advisor at Campos Wealth Management, told Moneywise.
Samantha and Ryan absolutely don't want to struggle to afford the higher payments just to become homeowners in their golden years, especially if they're already worried about making ends meet.
"If you are on a fixed income and do not have yourself in a place where you actively save and have an emergency fund established, you might consider renting. If your funds barely cover current living expenses and you do not have a surplus each month after covering necessary expenditures, you might also consider renting," Delgado said.
Read More: Are you paying too much for car insurance? Here are 3 clever ways to slash your monthly bill
The next thing Samantha and Ryan have to consider is how they'd pay for a home. They have two options, and both have their own problems:
They could borrow: Far more people (8) are carrying mortgages into retirement than ever before, but that doesn't mean it's a good idea. Committing to a monthly mortgage payment, especially if it is higher than rent, could mean straining their retirement budget.
They could pay cash: This would probably mean making a large withdrawal from their retirement accounts, which could have tax consequences and potentially raise their Medicare premiums . They also risk taking so much out of their accounts that they don't have enough left invested to continue to earn sufficient returns that help cover other costs annually.
If they did want to consider buying, they'd have to make sure doing so wouldn't affect their retirement income over the long term.
"You should start by seeking out a financial professional and build a retirement income plan," Domenick D'Andrea (9), founder of DanDarah Wealth Management, told Moneywise. "The last thing you want to do is to overextend yourself and your finances when deciding to retire."
