Buying a Home: Financial and Lifestyle Considerations for Retirement Planning

For many Americans, buying a home is closely associated with long-term stability and personal fulfillment. As retirement approaches, housing decisions can take on added importance, affecting cash flow, savings priorities, and lifestyle flexibility. While homeownership may align with certain financial or personal goals, it also comes with ongoing responsibilities and risks that are worth evaluating carefully.

This article explores key financial, time, and research considerations related to buying a home, particularly for U.S. adults planning for retirement. The information is educational in nature and intended to support informed decision-making.

The Ongoing Costs of Homeownership

Purchasing a home involves more than the initial transaction. In addition to a down payment and closing costs, homeowners typically assume responsibility for maintenance and repairs. These may include roof replacement, plumbing or electrical updates, appliance replacement, landscaping, and general upkeep.

For those nearing retirement, it may be helpful to consider how these ongoing expenses could affect a fixed or changing income. Housing costs can vary over time and may not always be predictable, which introduces a level of financial uncertainty that renters may not experience in the same way.

Financial Considerations When Buying a Home

Most questions about homeownership ultimately come back to affordability and financial readiness. Common considerations include the size of a down payment, the ability to manage monthly mortgage payments, income stability, and credit history.

According to the National Association of Realtors (NAR), 74% of homebuyers financed their home purchase in 2024, while 26% paid entirely in cash. First-time buyers were more likely to use financing, with 91% obtaining a loan compared with 69% of repeat buyers. Savings were the most common funding source, especially among first-time buyers, though some relied on gifts or loans from family members.

Different loan types may be available, including conventional mortgages, Federal Housing Administration (FHA) loans, and Department of Veterans Affairs (VA) loans. Each option carries distinct eligibility requirements, costs, and risks. Understanding these differences may help buyers evaluate how a mortgage fits into a broader retirement strategy.

Survey data also shows that many buyers view homeownership positively from a financial perspective. However, perceptions of value or long-term benefit are subjective and may not account for individual circumstances, market conditions, taxes, or liquidity needs.

Time, Energy, and Lifestyle Factors

Beyond finances, buying a home requires a commitment of time and effort. Maintenance, repairs, and administrative tasks can increase with age or changing health needs. Some individuals prefer renting because it may reduce these responsibilities.

The median age of first-time homebuyers rose to 38 in 2024, while repeat buyers had a median age of 61, according to NAR. Household composition also varied, with married couples representing the largest group of buyers. A growing share of buyers did not have children living at home, and some purchased multigenerational homes to support aging parents or adult children.

These trends suggest that housing decisions are often influenced by family structure and lifestyle preferences, which may evolve as retirement approaches.

Research and Preparation

Careful research is an important step in the homebuying process. Prospective buyers often begin by exploring mortgage pre-qualification or pre-approval. Pre-qualification is generally based on self-reported information, while pre-approval involves more detailed income and credit verification. Understanding this distinction can help set realistic expectations.

Some buyers may also explore down payment assistance programs or grants, particularly those designed for low- to moderate-income households. Eligibility and availability vary by location and program.

In 2024, 88% of buyers worked with a real estate agent or broker. Buyers cited help with finding suitable properties and negotiating terms as primary reasons for using professional assistance.

The Home Search Process

Once preparation is complete, the home search begins. Buyers reported spending a median of 10 weeks searching and viewing a median of seven homes. Online tools played a central role, with photos, property details, and floor plans among the most valued resources.

Because buying a home is a significant financial commitment, it may be helpful to clarify priorities in advance. Considerations may include location, accessibility, proximity to family or healthcare, and long-term suitability as needs change.

How Buying a Home Fits Into Retirement Planning

A home can be both a place to live and a major component of household finances. How it fits into a retirement plan depends on many factors, including housing costs, savings goals, tax considerations, and personal preferences. Homeownership can offer stability, but it may also reduce liquidity and introduce ongoing expenses.

Working with qualified professionals, such as housing counselors, real estate professionals, and financial professionals, may help individuals evaluate how buying a home aligns with their overall retirement planning approach.

External Resources

• Consumer Financial Protection Bureau (CFPB)
• Financial Industry Regulatory Authority (FINRA)
• Internal Revenue Service (IRS)

Source: National Association of Realtors, June 23, 2025.