How To Decide Whether To Rent Or Own The kids of the housing crisis — those 35 and under — are among the most eager to buy today. Here are some tips, for everyone, on how to weigh whether renting or buying makes the most sense for you.

Millennials Make Up Biggest Share Of Homebuyers

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Renting is the new buying. That became a kind of mantra after the housing crisis. Many Americans stopped believing that owning a home was a way to build wealth. Things could now be changing a bit. And as part of a series we call Your Money And Your Life, NPR's Aarti Shahani reports that people who were kids during the crisis are now leading the pack when it comes to buying.

AARTI SHAHANI, BYLINE: Here's a fun fact. Millennials are the single biggest group of home buyers in the U.S. - more than Gen Xers, more than boomers. It's the people 35 and under who are taking the leap.

AMANDA LARSEN: Really, I really want a dog (laughter). And my husband won't let me have one until we have a house.

ERIC SHANNON: My mom's into real estate, and I understand she can be me mentor.

LEE DAVIDSON: I just feel increasingly boxed in, I guess. I just have kind of moved from one little box to another.

SHAHANI: That was Amanda Larsen, Eric Shannon and Lee Davidson. They each have some savings. They're tired of renting, and while people five or 10 years older may still be shell-shocked from the housing crash, this younger generation seems ready to start that new chapter, even if it didn't go well for their parents.

LARSEN: You know, don't make some of the debt mistakes that they made.

SHAHANI: Larsen, age 24 in Kansas City, recalls how her mom kind of messed up - took on larger loans that she could afford. And her mom warns her - stay within your limits.

LARSEN: Get the exact number that you know you're going to be approved for and don't go above it.

SHAHANI: For a few years, Lee Davidson, a 35-year-old in Tampa, felt like she had no business buying because her personal life wasn't where she wanted it to be.

DAVIDSON: I'm single. I'm not with someone. I don't have a partner. I'm not married. I'm not anywhere near being married.

SHAHANI: But now she realizes her career is solid, and it's time.

In the years since the housing crisis, really good, free tools have come out - online calculators that help you calculate, based on your numbers - at what point does it make more sense to buy a home versus keep on renting?

NPR gave the aspiring homeowners a homework assignment - try out the calculators.

Did you have a chance to do the homework?

DAVIDSON: I did. I was slammed at work, but I squeezed it all in.

SHAHANI: Davidson was struck by the numbers that mattered. It's not just the sale price of the home and interest rate. It's also how many years you plan to stay.


SHAHANI: Another part of the assignment was to get on Skype and talk directly with economist Jed Kolko. He helped create one of the calculators by the real estate company Trulia. And he explains to Davidson - whether you keep the home two years or 15 makes a huge difference in how much of it you own, the equity you're building. One big factor that calculator does not factor - human behavior. That is - how likely are you to save versus spend - to put your money into a mutual fund versus a frappucino.

JED KOLKO: If you're the sort of person who has no trouble at all saving every month, then that advantage of homeownership might not mean that much to you.

DAVIDSON: OK. I save, but I save minimally (laughter).

SHAHANI: So buying a home could be a way to make you save. The calculators ask a kind of unfair question too. How much will the home you buy go up in value? That is really hard to know. Even the experts get it wrong. Eric Shannon is betting, optimistically, 10 percent appreciation every couple years.

SHANNON: I'm seeing houses that are going on the market, and they're going off very soon thereafter.

SHAHANI: But Kolko warns him - Tulsa is a one-industry town, the oil and gas industry, and it's hurting. So someone like Shannon, who works as an engineer there, could lose his job and see his home price crash too.

Meanwhile, Amanda Larsen discovered she and her husband could buy bigger and still pay less than their current rent. He wants to buy and never move again, so now she is going to tell him...

LARSEN: We can technically afford a little bit more. And this way, you get more of what you want, and I get more of what I want.

SHAHANI: To try our the calculators for yourself and some other tools and tips on renting versus buying, visit the NPR Facebook group Your Money and Your Life. Aarti Shahani, NPR News.

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