Wife and I were going to buy a home 4-5 years ago, but that’s when rates were low and we were getting outbid by $50k+ and people were waiving inspections / appraisals. We’ve parked our cash in HYSA because we still have been looking to buy, and earn enough in interest to cover 2/3 our rent for the year.
The longer we go without finding a home to buy, the more I think about whether it’s even worth it these days. Home prices around us are still pretty high and the inventory still isn’t that great. Obviously the rate on our HYSA is going to fluctuate over the years, but right now it’s covering most of our rent and we don’t have to worry about all the issues that come with a house and owning. I have a hard time believing that if we did buy a house today that it would grow in value over 20-30 years. Prices are still 600-700k for a basic track house, and I can’t see those houses being $1+ million in value over the next 20-30 years if we purchased. We’d be putting so much money down and toward interest, that over the lifetime of owning I feel like the costs would be more than just renting. Am I looking at this all wrong??
Posted by bots_r_us_
3 Comments
Define your targeted timeframe for home purchase.
Define your (realistic) house fund need (down payment, fees, etc).
Define the rate at which you are saving for the house ($$/month).
Personal finance is personal and not purely a numbers game. There are many tangible and non tangible benefits to home ownership even if it’s not the mathematically most sane choice. If it were that black and white, it would be easy.
Go for the home if you can afford it even if it costs more.
I don’t think “there is no way these houses hit $1M in 30 years” is a particularly good take.
That being said, if HYSA interest is enough to cover your rent but that principal isn’t enough to very easily buy a house, renting sounds like it’s substantially cheaper in your situation.