This Financial Decision at 25 Can Create $847K in Wealth by 45
Owning a home has long been considered the American dream. If you’re able to start that dream early, making this move can come with a serious payout.
In 2025, the typical age of first-time homebuyers was 40 years old, according to the National Association of Realtors. If you’re able to defy this average by purchasing a home at age 25, doing so can brighten your financial future.
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Maybe you came into an inheritance, scored a generous bonus at an already well-paying job or have parents willing to offer financial assistance. Regardless, buying a home at age 25 – instead of waiting 10 years or more – can be an investment of a lifetime.
Buying a Home in 2026 vs. 2036
As of June 30, 2026, the average U.S. home value is $372,995, according to Zillow. It’s also important to note that home values increase an average of 4.5% per year, according to the Zillow Home Value Index.
Given this, if you purchased a home for $363,000 – slightly less than average U.S. home value – at age 25, it would be worth $875,452 in 20 years, when you’re 45 years old, according to the C & F Mortgage Corporation future home value calculator.
Comparatively, if you wait 10 years to buy the same home – assuming a 4.5% value increase per year – it would cost approximately $563,728. Buying at age 25 instead, means you’ll save $200,000 on the sale price and already have 10 years of equity by age 35.
Monthly Payment Breakdown
If you have $875,452 in home equity, this means you’ve paid the home off in 20 years. While lenders typically offer 15-year- and 30-year-fixed-rate mortgages, a 20-year fixed-rate mortgage is also a common option, according to Freddie Mac.
Even assuming the same purchase price and terms, monthly mortgage payments can vary wildly from one person to the next, according to a number of factors – i.e., down payment, interest rate, homeowners insurance, homeowners association (HOA) or condo fees and property taxes.
For example, if you purchase a home for $363,000 with a 20-year term, 10% down payment – i.e., $36,300 – 6.69% interest rate, $2,273 annual homeowners insurance, no HOA fees and $4,538 annual property taxes, your mortgage payment would be around $3,197 per month, according to the Fannie Mae mortgage calculator.
On the other hand, if your $363,000 home with a 20-year term, has a 20% down payment -- $72,600 – 5% interest rate, $2,400 annual homeowners insurance, $200 per month HOA fee and $3,500 annual property taxes, your monthly payment would be roughly $2,608.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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