Owning a Home Is Completely Overrated

Rant 31

sold housePart of the American dream has always been home ownership. It's just a fact. From the time most Americans are in their 20's, they are already thinking about saving money to purchase their first property. It is considered a "great investment" and a huge part of the successful life. And yet, things have changed.

Between the mortgage crisis and foreclosures and falling home prices, owning a home is just not what it used to be. So why are people still so obsessed with it? Just the other day, I was talking to a friend who is pregnant and she and her boyfriend were stressing because they still rent at 36 and have a second baby on the way. I get their concern. But honestly? Lucky them.

A conversation on Cafe Mom is also brewing about this same topic. Some agree with me. Some agree with them. But the reality is: no matter what your opinion, home ownership is just not what it used to be.

My husband and I bought our first home (a condo) when we were 27. We bought at the height of the market in a city where real estate is already very expensive. For about $100,000 more than our Ohio friends spent on their 3,000 square foot homes, we bought our 1,000 square foot condo in the heart of a very cool, up and coming neighborhood where we could walk to everything. We did not care about schools at the time. Or safety. Or any of the things parents of young kids have to care about.

We were childless and thrilled, furnishing our home with all the furniture we had recently purchased during a trip to Morocco. And then we got pregnant. And then the market tanked. Had we been renting, we would have probably bought a home in a good neighborhood at that point. But we were stuck.

Last fall, after seven years in a condo we had only planned to be in for five, we were finally able to get out. We were very lucky that we found a buyer who bought out home for what we bought it for. We walked out with just enough to put down on our new house, which is a suburb of NYC where real estate is even MORE expensive. We love our new house, but our property taxes combined with our mortgage mean we pay twice what we used to pay. Sure, we get better schools and the opportunity to do whatever we want with our house now, but we also get happy little surprises like broken pipes that cost $10,000 to repair. We have to foot that bill. There is no landlord.

That's the thing about home ownership. It is not just the down payment. It is every little bit of maintenance and all the savings you need for that. Plus decorating and everything else. And then there is STILL no guarantee you will get return on your investment.

We chose to buy because my husband still really likes the idea and we had enough to put down. But with less than 30 percent or so down, it seems absolutely silly to buy. Renting is not what it used to be and it can mean the difference between being stuck in a place and being able to get the hell out. If I had it to do over again, this home would be first we owned.

Sure, it all worked out, but we were very, very lucky. It could have gone either way and for us, it was just not a wise investment. If you don't have a large chunk of your own cash to put down (not borrowed) or the money to cover sudden large expenses, then keep on renting. Trust me. It's smarter.

Are you really into owning a home?


home repair, home life


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Lovin... LovinJerseyMama

The few reasons I would love to have my own home are- 1. No neighbors within talking, or preferably yelling, distance. 2. Lots and lots of land to have my own farm. Other then that, I could care less about home ownership. Too much money, too many hassles. We live rent free (one of the perks of my boyfriends job) in a nice apartment. We both enjoy having our paychecks go towards fun things to do as a family. I was able to be a stay at home mom for many years and now I just work weekends. The one thing we will be changing soon is moving to a better school district. Unfortunately our towns school system is just awful. Luckily his company will pay for us to live wherever, within reason lol. Some days I think about how nice it would be to have our own home. But you can't beat free living! My girls get to enjoy so much more out of life, and so do we, with just living in an apartment :) 

Hello07 Hello07

I agree on the large down payment. You lose to much money in interest if you do it any other way. It doesn't make a whole lotta financial sense if you lose that much.

However, you were 27 buying a home and didn't think about the neighboring schools and etc.? That just seems dumb.

lobus lobus

I think buying a house as an investment is over...but I still want to buy a house because even if you sell and break even, it's better than having thrown away that money for rent to build someone else's equity. I do like that maintanece is not my problem but I hate having to ask permission for things and not wanting to put holes in the walls. We will be buying our first house soon with the VA loan and school district and safety are top of the list even more than the house. And we won't need a down payment which is a bonus.

mande... manderspanders

The return on investment is a home that you OWN in the end. That is yours. Someday you will be old and unable to pay rent.

Sasha, it sounds to me that if you can't handle the maintenance that comes with home ownership, perhaps you just can't afford to live in NYC or suburbs.  The reality is that entitled people such as yourself helped perpetuate the bubble, willing to shell out anything to be "hipster", to have something completed "updated" etc, etc.   Not every place in this country is expensive to live (and even places that have fared the recession quite well); and there are loads of better places to be than NYC.

schlis schlis

Thank you manderspanders. The reason buying a home is a big deal is that YOU NEED A PLACE TO LIVE. If you buy somewhere that is overpriced or doesn't offer what you will need in a few years, you're just a dummy. I live in southern Texas. I have a lovely little 3 bedroom, 1600 sq/ft, new construction house, with wonderful schools and great parks, and it only cost just over $100k. It actually costs us LESS to pay our mortgage every month than it did to rent a 900 sq/ft appartment just down the road, even without a large deposit. That's just how the market is here. Paying too much for something is no one's fault but your own.

Sky Lar

What manderspanders said. The idea behind buying young is so that when you hit retirement age and a fixed income - having a place to live won't be one of your fixed expenses. My parents first bought their house for 30K in the 80s and even though houses like that are about double that now - their mortgage at the end was still only 300/month. Had they been renting the amount of income paid toward housing would have kept going up.

Yes it does suck doggy ears to not be able to move right when you want but I think that just means you shouldn't buy unless you plan on staying there permanently. You should never buy into a place that you plan on moving out of in just a few years or you'll end up in your exact situation.

mande... manderspanders

We bought our home 1.5 years ago. It's a small starter home, we don't plan to be here forever. BUT, rent in my area is high because we have a university... my house payment with taxes and insurances is the same as my rent payment for a smaller apartment, on a busy street, with no garage, no yard.  Funny thing is, if we decide to keep this home and use it as a rental (whenever we do decide to "buy up"), I can EASILY get $900-950 month in rent (my payment is $600)... so it is something for us to think about. If we decided to sell right now today, I could get about 6-7k more than paid for it AND it would sell within a week!  We have put about $2k in improvements in it and have one more "big" project to do that will run about $1k.  But we knew we would do that when we bought it.

If you buy smart, you can't go wrong with home ownership.

nicol... nicoleeolee

I capitalize on renters. Please, do me a favor, PROMOTE renting;) 

You can pay LESS on a mortgage every month for a home you will OWN (be able to sell/rent later if you like) than you will renting every month. We're talking over double for rent than the mortgage. 

Now tell me again: RENTING is smarter?!? Smarter for me to rent out my homes to people like you than for me to sell them, yes. :)

Math doesn't lie.

Marcella Oglesby

My partner and I are in the process of buying a short sale, and while it has been a painstaking process it will be a huge investment, and overall savings for us. We are in Chicago and able to get a two bedroom lake front condo for $70,000; not only will it resell for more in a few years, but we will be saving over $500 a month in what we pay in rent. With the interest rates at their current rate you would be a fool not to look into buying.

bella... bellacazzate

I have an odd job, but one of the intrinsic benefits is that it places me in excellent housing, be it a large apartment in a high rise or a small house on a campus/in town. We move rather frequently (every year to three years), but not having to deal with actual ownership is amazing. 

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