I’m going to wait to buy”; “Buying a home right now is just too expensive”; “I don’t want to be tied down to a mortgage”…
I hear these types of responses all of the time. It is disappointing when I know they could qualify to buy a home because, I know prices and interest rates will only go up over time. I also know that renting costs more than buying when you consider all of the related elements of dwelling costs.
My grandfather was born in and lived his entire life in San Francisco, CA. When he was in his 20s he could have bought a house in San Francisco for $7,500. Today, homes in S.F. range in the millions of dollars. Unfortunately, he never did buy but rented. Had he purchased a home our family would be enjoying the beaches in Cancun.
Here is an article from “Market Watch” which addresses the question we all grapple with at some point in time. He also points out that we don’t need to buy a dream home to get started. Buy what you can afford now and move up has time and circumstances change.
In some cases there are legitimate reasons why someone can’t buy a home now: poor credit, saving money for closing costs and down payment, pending job relocation. However, when you look at the reasons they are most often temporary and can be remedied.
Our daughter is currently renting. She and her husband just got full time jobs and have little savings. In the beginning, their landlord was pleasant and promised to take care of her place. However, things quickly changed. To make matters worse, he just raised the rent 28%! I’ll give you one guess what goal has moved to the top of their list.
If you are pondering the “rent vs. buy” question, I strongly recommend that you start the buying process as soon as you able.