When Are You Buying A House?

What to say when people won't stop asking about your living situation.

It’s a topic that gets brought up nearly every time I go back home to visit my family and friends in the suburbs — “When are you and Joe going to buy a house?” To be perfectly honest, not being able to afford a downpayment on a piece of property is just one of the many reasons I don’t feel mature enough (or financially ready) to own a home yet. We haven’t been in our NYC apartment for a full year yet, but I already know that I love our current living situation, and we have no near-term plans to move out. Despite expressing our happiness with being here, the buying-a-home-question is one we get asked most frequently now that we’re married.

At this stage in our lives/relationship, buying a home seems like the logical (and “right”) next step. However, the prospect of it still terrifies me. The weighty responsibility of “doing the deed,” the epic search, the extraneous costs, the unforeseen repairs, the lack of mobility, and the cleaning and organization required in a much larger space, shouldn’t be glossed over. My palms are sweating just thinking about it! Don’t get me wrong, daydreaming about interior design mood boards, large-scale DIY projects, having a (gasp) backyard garden, a PANTRY perhaps (!!!), are all things I’m super excited for. However, those desires doesn’t erase the fact that it is a big decision that requires you to have a five-to-ten-year roadmap of where your life is headed, and for Joe and I, that’s simply not the case at this point.

I totally get the value in homeownership and how it builds equity, which is a real and valuable investment if done in the right context/circumstance. My brother and his wife bought a fixer-upper, did an incredible job renovating it, and have truly created value in the home that they will (hopefully) recoup when they sell. I also have many friends (my age) who already own homes, but it’s a deeply personal decision that everyone has to make for themselves when the time is right.

There is a lingering notion that homeownership is the ultimate sign of financial success, and it is surely a marker of it in some ways, but I don’t like the argument that home buying is the end-all be-all. Even though I know owning a home doesn’t mean ultimate financial security, every time Joe and I say we’re happy with renting for now, the sentiment is usually met with confusion and concern that we’re flushing money down the toilet. Obviously, NYC is crazy-expensive, so the argument for renting in general is not as useful as, say, the argument for renting in a less expensive city. The cost of living is inflated, with renting prices right along with it.

All of that to say, I recently came across this article on LifeHacker called, Why The Rent Vs. Buy Debate Is Completely Pointless, written by Kristin Wong, which helped assuage my feelings of guilt/financial concern. In the article, Kristin lays out the different arguments for home buying versus renting, and why championing one over the other is a silly endeavor. In a world seemingly full of extreme “pro-home buying” or “pro-renting” individuals, her perspective is one I hadn’t heard expressed before. It was refreshing. When she explained that neither preference is fundamentally “good” or “bad,” I felt myself slowly nodding along with her thinking, “yes, she gets me!” She links out to several articles that explore both sides, which is where I, myself, stand — I can see the value in both points of view.

It’s useful to get some facts from both sides of the equation to begin formulating your own opinion on the matter. Obviously, my knowledge is limited since I’ve only been in the renting camp for the last eight months. Below are some pros for both arguments, but note that the points listed below aren’t full in-depth analysis of each side’s case. They’re a simple sampling of the logic that people on both sides can get behind.

PRO-HOME BUYING:

Experts say that if you don’t buy a home and continue renting, you’ll miss out on your mortgage tax deduction. An article on TIME describes the logic with an example, saying:

If you were to buy a home at the national median price (now about $229,000) with the standard 20% down payment and a 4% fixed mortgage rate, you could get a roughly $7,269 write-off in Year 1 — and end up paying $1,817 less that year in taxes, assuming a 25% effective tax rate.

The article goes on to explain that since interest rates on houses and mortgages are in the historic lows, you’re missing out big time on an opportunity. An article written about the missed opportunity cost, written by Jonathan Smoke, states, “Waiting to buy into the housing market right now is like waiting to start contributing to your 401(k) when the S&P is near historic lows. You’re losing out on the time value of money — and you’re missing out on a great buying opportunity.” A valid point to be sure, but it’s still just one side of the argument. There are great articles to read up more about it here and here.

PRO-RENTING

There are also a good deal of reasons why renting is a smarter option, and the articles here and here do a good job in mapping out the logic behind that argument. Some of the main arguments is that renting affords you greater flexibility to move around/change jobs, there’s no large down payment, no maintenance costs or repair bills, or real-estate taxes to pay. One article on Investopedia expands on some of these facts, saying:

“An obvious benefit that renters have over homeowners is that they do not have to pay real estate taxes. Real estate taxes can be a hefty burden for homeowners and vary by county. Although property tax calculations can be complex, they are generally determined based on the estimated property value of your house. With houses getting larger and larger, property taxes can be a significant financial burden.”

Again, there are great articles to read up more about it here and here.

Stumbling upon the LifeHacker article made me feel more at ease with me and my husband’s decision to take the feeling of, “HOLY SHIT, WHY DON’T WE OWN PROPERTY YET?!” down a notch. There are other really special and valuable things we’re using our money for at the moment, and reading that it’s OK if we choose to rent versus buy, at least for the time being, made me feel validated in our choice. That article inspired me to learn more about the ins and outs of the home buying versus renting decision-making model, and focus on our financial situation more than how we look to others. I’ve learned to let go of some of the stigma, and I think that if people knew more about both sides, they would, too.

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