Stop telling me to buy a house! One renter's story
Filed under: College, Credit, Debt, Real Estate
It's time to buy a home! That's what I hear several times a week from friends, co-workers and commercials. I've heard the same prediction since I graduated four years ago and signed a lease on an apartment to share with my new wife. We've been living in the apartment ever since, and despite its small size, it has served us well. Even though I want to get a house, and I assure everyone concerned with my living arrangements of this desire, lest I be cast as a financial fool or someone who doesn't buy into the American dream of home ownership, it doesn't stop. When I graduated I was still swept up in the dream of owning a house, but for lack of money, settled for an apartment, despite the fact that it seemed like we could afford one of the zero down variable rate mortgages at the time. It didn't take too long, six months, before we realized just how much the last four years of education was going to cost us, and put our dreams of home ownership on hold. That's right; we made the responsible decision to hold off on buying a house we couldn't afford; even when banks would have gladly given us money, showing restraint that even more informed individuals, like an economics reporter for the NY Times, failed to exercise.
What's it gotten us? Well to start, Spanish Inquisition-style questioning from individuals who don't know the burden of today's student loans. Well-intentioned individuals consistently ask us why we don't have a house and choose to rent when it's a great time to buy. Surprisingly we hear, "When are you going to buy a house?" more often than "So when are you going to have some kids?", which is almost enough to make me break my promise never to write to Ann Landers, or whoever her latest incarnation is.
Aside from telling me how to spend my money, these homeowners, several of whom haven't taken a look at the housing market in our area except for seeing a great fixer-upper that was recently foreclosed on, don't take into account the glut of homes that don't appeal to us for numerous reasons. Despite my DIY nature when it comes to many things; a contractor I am not. While I could spend additional money that I don't have hiring the work out or begging my family for assistance, I'd rather wait to find the right house for us. After all, a $100,000 home that would require an additional $40,000 in renovations and upgrades is hardly a bargain when you're borrowing.
If that means waiting another 12 months until we have a sufficient down payment and it's clear that our jobs aren't at risk of disappearing, so be it. And if that means I have to spend an extra $5,000 because home prices have begun to rise, I can live with that, because I'll be living in my own house, not begging my in-laws to let us live in my wife's old room since we were foreclosed on.
Another reason I'm content with renting for now: if our situation changes; we need to move for work, we get horrible neighbors, we get hit with a huge expense, etc., 60 days and $250 breaks our lease and all obligations regarding this shelter. This provides us incredible flexibility to deal with life's circumstances and adapt to whatever comes our way without the need to sell a house.
The moral of this story is that we all have our own reasons for making financial decisions, and despite the fact that the time might be right for you or somebody else to buy a house doesn't mean it's the right time for me. I'm not oblivious to the fact that interest rates are at record lows and many homes have sat on the market for a year now; but what these helpful voices seem to forget is that I pay more in student loans every month then they spend on their mortgage, work for a non-profit and haven't gotten a raise that even resembles a traditional cost of living increase since I started working. Plus we have an insanely low rent for our area.
Do me a favor and stop applying peer pressure to buy a house. Unless you want to fund my down payment, we'll do it when we have the financial resources to do it right, something more of my fellow Americans should have done. While you're at it, take a crash course in the lost art of personal responsibility.
Reader Comments (Page 1 of 1)
5-19-2009 @ 4:13PM
godshalk said...
If you are so fiscally responsible, where did all of your common sensibility go when taking out student loans?!?!?! If your repayment on student loans is higher than my mortgage payment every month, and you are working at a non-profit for almost no raises, then you are a fool for reasons other than not buying a home. Who in their right mind would get an education that costly if it couldn't even provide them with an occupation that enabled them to repay their loans in an expedient manner?
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5-19-2009 @ 4:27PM
Josh Smith said...
I never said that I was always fiscally responsible. If I had it to do over again I would have taken out far fewer student loans.
Sorry If I came across unclear, I like my work and can easily pay off my student loans. The problem comes from everyone else trying to tell me what to do without knowing my financials.
5-20-2009 @ 8:57AM
da governator said...
Wow, off-topic much?
Josh, I rent too and it's true, the push to buy doesn't stop. Obviously it's an option for some and not for others, but people can get uncomfortable when others do something they wouldn't do in their own life. Just because I rent doesn't mean that I tell my friends who own their own home that they're stupid. Although if they bought between 2-8 years ago, I'd have a point, but I wouldn't go there because it's none of my business. Live and let live, everybody.
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5-19-2009 @ 6:05PM
Adam said...
I'm with you Josh... at the moment we "own" our house... our 2nd one.. but being self employed and with three kids and the economy the way it is.. I was offered a FT job and took it.... the drawback is location.. Southern Cal (where we used to live...we moved to CO 4 1/2 years ago... sold at a great time... ) have a great house now... but market is soft...
Now everyone, friends and family say where you going to buy.. and now is the best time...
well not really...
1. CA houses are pricey
2. Family isn't moving out until the house is sold or rented.. or short sale (ug) ...
3. I'm a little over home ownership for the moment.
4. there are pros/cons to both sides... but the days of huge gains in 2 - 4 years might be over along with "affordable" housing in many cities.
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5-19-2009 @ 8:15PM
Akaterina said...
You should read the money advice columnist Bruce Williams who says that buying a house is not necessarily a good investment but more of a life-style choice. He points out that appreciation of a home depends on the market and how the home has been maintained. When you rent, if the faucet breaks, you call the landlord to have it repaired, when the roof leaks, the landlord takes care of it. I am working on my second old house and I can tell you that the upkeep is nothing to laugh at. Just wait until you need a new roof, or the appliances start to go, or you have a major leak. Renting might be the smarter option for a lot of reasons. I would advise anyone who owns a home to put money aside in a savings account just for upkeep and repairs.
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5-19-2009 @ 11:26PM
Rachael said...
I also read the Bruce Williams column and agree. I am a very happy renter after graduating from school a year ago and maintaining my first job. I have already had several people (including today!) try and tell me that now was the time to start thinking about a house!
I am sorry but my fiance is about to start med school, I am very strict with our finances and like to make educated and well thought out choices. In my industry I see many people every day that live well beyond their means and their credit speaks for itself. Just because you can does not mean you should!
I stand true to the principle that you should never buy something purely based on the fact that it's a "good deal", there will always be another "good deal!"
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5-21-2009 @ 4:19PM
Lanie said...
Being a home owner for 51 years, I'm ready to sell but can't right now. The taxes, repairs and insurance are getting so bad, is it worth it? Soon, interest paying on a mortgage will not be deducted on taxes. They will get to that soon. Rent may be high but you don't have the worries. Something to think about.
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5-25-2009 @ 4:45PM
Lara said...
Josh, good for you for thinking this through and realizing that homeownership is not for you right now. The downpayment and monthly mortgage payments (with taxes and insurance) are just the tip of the iceberg when it comes to the expenses involved in owning a home. We just put a new roof on our house to the tune of $26k. In the past 6 months we've put another $8k in maintenance - nothing broken but just looking very neglected and needing replacement. My husband is very handy around the house so he does all our electrical, plumbing, and carpentry work. Even at that the expenses are sometimes staggering. Even though our house is in a very good neighborhood, if I added up all the $$ we've spent on it over the years, there's no way we'll sell it for more than what we've put in to it. Then add in property taxes and insurance paid over the years and we'll be getting probably about half what we've put in to it directly or indirectly. Someday we plan to sell our home and rent an apartment.
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6-02-2009 @ 12:04PM
Trish said...
I agree that homeownership is not for everyone. My husband and I are 50 yrs. old. We've owned two houses, but have been strapped by debt WAY over our heads just keeping them up. How I wish we would have rented all along. We are solidly middle-middle class, and I think we would be much better off if we had never owned a home. If the market ever recovers, I plan to sell our currrent 60 year old house, and move to a nice, simple apartment. Let the problems be somebody else's problem.
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7-07-2009 @ 9:30AM
Alan said...
This is why you have the large divide ... the wishing to become first time buyers vs I own a house i cant sell ...
http://alanspicer.wordpress.com/2009/07/07/housing-markets-reccession-solution/
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7-15-2009 @ 2:22PM
SR5 said...
"godshalk", you are such a LOSER. Do you own the perfect home, have the perfect job and completely pay off ALL of your bills at that end of each month? I'll bet you don't. You are probably one of these idiots who actively participated in this housing meltdown that ultimately screwed the rest of us who do live within our financial means. Do you have a clue as to how much any kind of higher education costs these days, even at community college level? Some of us actually paid for ALL if our own higher education. People whose Mommy and Daddy paid for their education don't have clue about how the real world works, that's why so many of you are in debt up to your eyeballs and on the verge of bankruptcy and foreclosure. Misery LOVES company pal. As far as where this man has chosen to work, that's NONE of your business too. There's not a a lot of jobs to choose from as it is these days. He's not asking you for a handout is he? No, he's not so just SHUT your jealous yap and move on. This man is using his head wisely, you clearly don't. You could learn a lot from this man if you'd listen instead of nitpicking PETTY NONSENSE to criticize him for to make yourself feel good. He IS being financially responsible, are you???
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