In the past, conventional wisdom pushed everyone into buying a home—because it’s a great investment, plus a key factor in being an adult.
But is that still true?
In the real estate financial crisis of 2008, housing prices crashed and millions of people were left “upside down”—owing more on their mortgages than the house was worth. The truth is you can’t depend on the value of your home going only up.
Owning a home is a huge financial investment, and it’s not right for everyone. Here’s a look at some reasons you might not be ready to make this move just yet.
1. Your income isn’t secure
This is probably the most obvious one—but if your income is unstable, now is probably not the time to take on a financial obligation this big.
A home is much more of a commitment than a rental agreement. If you lose your income and don’t have a decent savings cushion, you might need to sell in a hurry—but selling a house can take months, depending on the market.
2. You have a large amount of debt
If you’re already carrying significant debt, such as student loans, a mortgage payment may be more than you can handle.
The more in-debt you are, the riskier your financial situation is—even if you’re making decent money at the moment. Owning a home makes you more financially constrained if you hit a financial snag—such as losing your job or facing large medical expenses.
If you’re carrying a lot of student loans or other types of debt, it may make more sense financially to pay off those loans before taking out a mortgage.
3. You might move soon
If you’re not ready to commit to being in one place for at least five years, you may be better off renting.
It’s expensive and time-consuming to both buy a home and sell one, and renting is generally a much more flexible option.
4. Other people think you’re ready—and won’t stop talking about it
There’s no question that to a lot of people, owning a home looks like a critical step in adulthood. If you have a steady job and a spouse, well-meaning family members might be prodding you toward buying.
But you should buy because you’re ready—not because other people feel you have to live up to some arbitrary standard of adulthood. Buying a house is a huge commitment, and it’s not right for everyone—regardless of your job or marital status.
5. You don’t have a lot of time or money to put into the home
Houses just take more time than rented apartments. You have to keep up the lawn, fix everything that breaks (or pay someone to do it), and handle major safety issues, like mold, lead pipes, and structural issues by yourself.
In an apartment, you can just call the super when something breaks. In a home, it’s all on you—and those maintenance tasks can add up. If your life and job are already demanding, owning a home may just add to your stress.
6. The mortgage payment is affordable—but only just
Some people make the decision to buy a home because the mortgage payment works out to less than they’d pay in rent. And that looks like a good deal—on the surface.
But the price of your home goes way beyond the mortgage. In addition to closing costs—these are usually around 2-5% of the cost of your house, which can add up to $3,000-$7,500 on a $150,000 home—there’s also the cost of repairs.
Sure, some you can do yourself—if you have the time. But what if your roof leaks? Or you have to replace the water heater? These more complicated repairs can cost thousands, and you’ll need considerable savings to pay a professional unless you can do it yourself.
There’s also mortgage interest, property taxes, homeowners insurance, and homeowners association fees—and these can jack up the price tag on your home.
Owning a home can be a great investment—but it’s not right for everyone, and it’s not an automatic ticket to wealth for every person. It’s a huge financial commitment that doesn’t always pay off. Buy a home when you’re ready—there’s no shame in waiting until then.
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