9 ms·

I'm a single male, 30, who can currently afford to buy a house but isn't sure if I want to. I understand it's an asset investment, but i fear that it might lar

I'm a single male, 30, who can currently afford to buy a house but isn't sure if I want to. I understand it's an asset investment, but i fear that it might largely be detrimental to my lifestyle. I live in a high CoL area (Seattle), when I can only think about buying a house in the suburban area. This will increase my 10 min walk commute to at least 45 min bus/car ride. My social life may suffer due to the distances, but at the same time I want a place to call it my own. Anyone else going through the motions or have a different perspective on how to figure out my dilemma?!

numbers 7y ago
Same page as you in San Francisco, plus houses are prohibitively expensive here so that doesn’t help convince me to buy. Commute is currently 12-17 mins depending on how I get there, I don’t want to lose that just yet.
trevyn 7y ago
You are a human. Your place is the Earth. Feel at home with yourself, and you won’t need physical ownership to feel safe.
- me_me_me 7y ago
  Do you mean - Don't buy a house, live in a van?
  - exhilaration 7y ago
    Down by the river?
newen 7y ago
Friend of mine, single, 30, in DC bought a condo. He seems to be happy with it since he is planning on being there for a while.
cpitman 7y ago
Similar situation. If I bought a home, I would likely need to get more house than I rent (since it needs to be a place I can live for 5+ years). Additionally, in my market housing appreciation is not keeping up with the stock market. So it is both more expensive and less convenient to own a home for me.
jackcosgrove 7y ago
If you are unattached you should absolutely not buy a home in a suburban area, or anywhere really. Planting a stake in the ground will make it harder to move to chase after better opportunities elsewhere, and that opportunity cost probably outweighs any asset appreciation you would see. Buying a primary residence should be treated as an opportunity cost for the invested money, as well as a necessity for the shelter. If you are coupled it's harder to coordinate big moves so that makes owning more attractive, and if you have children you also want a stable environment for them to grow up in. But all told there are far better investments than a primary residence. Seattle also has a high price-to-rent ratio: https://www.mashvisor.com/blog/best-real-estate-markets-price-to-rent-ratio/ https://www.mashvisor.com/blog/best-real-estate-markets-pric... You may actually lose money on a cash flow basis if you buy.
- ghaff 7y ago
  >If you are unattached you should absolutely not buy a home in a suburban area, or anywhere really. That's nonsense. You shouldn't feel you have to buy one for financial reasons. But even if you're unattached, as I was when I bought, many of us like having a place of our own with more room than an apartment that you can change as you see fit. Yes, it limits mobility to a degree. But I've changed jobs several times since I bought my house.
  - jackcosgrove 7y ago
    I overstated it because I was assuming a certain motive (financial), which as you pointed out may not be present. But as a young, unattached person mobility is one of your top competitive advantages in the labor market. I'm not talking about switching jobs in the same metro. I mean moving to an entirely different metro.
    - ghaff 7y ago
      It does depend upon where you live to some degree. I wasn't that young (late 30s), was in a metro with a fair amount of tech (Boston) most of which was out west of the city where I already lived and worked, and had pretty much already decided I wasn't interested in moving to the Bay Area. Sure, circumstances could have changed but I pretty much bought when I did in part because I decided that mobility wasn't that big a deal for me any longer.
ghaff 7y ago
TBH, those are the sorts of things people should be thinking about with respect to home purchases. Yes, there's a financial angle but that includes a lot of unknowns. Factors like mobility, proximity to work/entertainment/friends, time associated with upkeep (especially for standalone properties), etc. are probably what a decision should hinge on.
Simulacra 7y ago
YES. You should absolutely buy as soon as possible. I went through this when I was 30 before I got married and wished to hell I'd done it sooner. 1) You don't need to put down 20% anymore. If you have a W2 job and good credit, you can have your loan backed by the government in what is called an FHA loan. 2) Think of home ownership as putting a stake in the ground, but not being tied to that stake. You may only live there for a couple of years. You get a better job, get restless, that's ok. Move! You can rent out that house or sell it and pull some of the equity out of it. 3) Prices keep going up. Buying lets you lock in a fixed monthly rate, removes the fear of rent increases, etc. Heck get a condo and live downtown, live anywhere. Buying means taking control of your living situation and not having to be at the mercy of others.
- awinder 7y ago
  I agree with your point but disagree with some facts if you will allow some extra, potentially helpful information: 1. You can get into a house with good credit and 5% with private mortgage insurance. PMI goes away at 20%, fha you pay the mortgage insurance for the full term unless you put down +10% and wait 11 years. But you can always refi out of an fha loan, just compare your options because fha mortgage insurance is very expensive. 2. The break-even with financing costs usually means you’ll want to own for at least 7 years. If you know/heavily think you’ll be in a place for less than that and you don’t wanna rent it out then maybe don’t buy. 3. Sometimes prices go down tremendously. But you do lock in a payment, that you can make go down over time. Whereas rents tend to go up over time, or you incur expenses like moving or security deposit lockups etc. Personally I’ve found one of the greatest benefits is that I control the destiny of the property. Every place I rented, the owner did not invest in the property, fixes to problems were done at least immediate cost (long term costs be damned!), etc. Now I can maintain the stuff that can break down well, get ahead of problems, and save a lot of my own time and prevent discomfort. Which is hard to put a price tag on.
- im3w1l 7y ago
  "Asset management firms are required by the Securities and Exchange Commission to say that past performance is no guarantee of future results"[0] I do agree with your other points though. [0] https://www.thebalance.com/past-performance-is-no-guarantee-of-future-results-357862 https://www.thebalance.com/past-performance-is-no-guarantee-...
latencyloser 7y ago
I'm about your age, I also live in Seattle. Though, I do have a partner and a dog so that makes some difference. I chose to buy a home and I'm quite happy with it overall. It's a good place to have people over since it's much larger than the average apartment, I don't have to move every year or so to fight the rising rent, I have plenty of space for projects and storage of various hobbies. My family doesn't have to stay in a hotel when they visit because I have a spare bedroom now. I've also learned a ton of skills related to home ownership such as basic construction, electrical work, etc. which can be a plus if you're into that sort of thing. I prefer the quiet of the suburbs as well. That being said, my commute is atrocious. It's about 1.5hrs each way into the city. Even so, I feel it's worth it. But obviously may not be for everyone. Personally, I wouldn't look at it as an investment. It's more a lifestyle thing that you've gotta think you'll be happier with. My mortgage is the same as my rent was at the time, so I thought I was netting out just fine, but houses have a lot of expensive maintenance events that pop up and will put you in the red pretty quick if you're not careful. For example, my heat pump and furnace went out recently which will set me back several thousand to fix. So, while you're building equity in something, there is a hidden cost with that. Worth being aware of. Hope that helps.
murph-almighty 7y ago
Vaguely similar boat! Northern NJ though. I'm 24 and became single about 6 months ago. After this happened, I moved out of my family home to rent closer to work, which cut an hour off my commute. It's been a mixed bag financially and I've been borderline paycheck-to-paycheck (I do max my 401k, so it's more of a self-wrought liquidity issue). My thoughts: - I'm really getting punched down by the 20% down payment standard. I know PMI is a thing, but it's a fee that I'd like to avoid paying in addition to interest. Assuming 20% is enough to avoid PMI, even if I snag a 600k condo I need 120k down to not have a PMI. - I don't entirely know that I'd like to commit to this area, but I know I want to buy at some point, and I'd like to believe that snagging a property sooner than later will at least give me some leverage for a future purchase via the equity in the property. One of my friends bought a studio in FiDi for similar reasons- he'll probably break even in the `rent v buy` scenario but will at least have some sort of fund to fuel his next purchase via the equity in the apartment. - This is also a game of forecasting your income for some period of time. I'm in software development, which seems stable for now (I hope), so I'm pretty confident in my ability to eventually pay off a high mortgage. In the end, I have no hope of buying a place right now, all I can really do is shove money into a MM savings/mutual fund and wait around until its worth enough to convince a bank I'm worth their time.
- jackcosgrove 7y ago
  > I'm really getting punched down by the 20% down payment standard. I know PMI is a thing, but it's a fee that I'd like to avoid paying in addition to interest. Assuming 20% is enough to avoid PMI, even if I snag a 600k condo I need 120k down to not have a PMI. Ask lenders about what's informally known as a "piggy-back loan". You can put 10% down, then get a second lien withdrawing that 10% and putting it towards the 20% number. That can avoid PMI, but be aware that the second lien will have worse terms, often with a floating rate, than the first so it's definitely in your interest to pay that off really fast. These were abused during the housing boom but they're not intrinsically bad. It may be preferable to paying PMI depending on how quickly you can pay off the second lien and how disciplined you are with money.
  - kmano8 7y ago
JoshTriplett 7y ago
I took a long time looking for a home, precisely because I was unwilling to accept a long commute. Buying a house is not worth a 45 minute commute. Leaving aside the considerable additional expenses of commuting, and the missed health benefits of a 20-minute walk every day, you're now talking about spending 70 extra minutes per day commuting. That means 5 hours and 50 minutes extra commuting per week (total of 7.5 hours), or about 12 extra 24-hour days of your year spent commuting. You currently live 10 minutes walk from work. Don't move to 45 minutes drive/bus from work. That's a substantial chunk of your life you won't get back. And as other replies have pointed out, in the area you're in, owning may not be a win for you.
leetcrew 7y ago
from a financial perspective, neither renting nor buying is inherently better than the other. in a particular locale, one or the other might be better based on the price-to-rent ratio. so the decision of whether to rent or buy similar properties in a particular locale comes down to the local market, how long you can commit to staying, and your tolerance for different risks (rent increase, home repairs, suddenly needing to sell early). you're not really deciding whether to rent or buy though, you're deciding whether to live in the city or move to the suburbs, which is ultimately a personal decision. for the financial aspect, these articles might be helpful: https://affordanything.com/is-renting-better-than-buying-should-i-rent-or-buy/ https://affordanything.com/is-renting-better-than-buying-sho... https://www.getrichslowly.org/rent-or-buy/ https://www.getrichslowly.org/rent-or-buy/
LanceH 7y ago
Figure out what it would cost to really move into that house. Full mortgage payment with taxes and insurance, plus increased utilities, plus maintenance things like lawn care, HoA dues, etc.. Figure out that total and continue living where you live, but save the difference between living in a house and living at the location you want. All of a sudden a year passes and you have $15k in the bank and you've been walking to work in 10 minutes. As time passes you may find that you have enough saved to make a purchase a bit more luxurious (closer, bigger, whatever you like) than you could before. Or you may find that you like seeing that $15k/year that you now recognize as coming from not moving. I mostly do this with cars. When I pay one off, I keep that car payment going into our "car savings" account. I'm allowed to pay maintenance from it, but that's it. It's amazing how attractive a used/paid off car is when you see the savings against the alternative.

numbers 7y ago

Same page as you in San Francisco, plus houses are prohibitively expensive here so that doesn’t help convince me to buy. Commute is currently 12-17 mins depending on how I get there, I don’t want to lose that just yet.

trevyn 7y ago

You are a human. Your place is the Earth. Feel at home with yourself, and you won’t need physical ownership to feel safe.

me_me_me 7y ago
Do you mean - Don't buy a house, live in a van?
- exhilaration 7y ago
  Down by the river?

newen 7y ago

Friend of mine, single, 30, in DC bought a condo. He seems to be happy with it since he is planning on being there for a while.

cpitman 7y ago

Similar situation. If I bought a home, I would likely need to get more house than I rent (since it needs to be a place I can live for 5+ years). Additionally, in my market housing appreciation is not keeping up with the stock market. So it is both more expensive and less convenient to own a home for me.

jackcosgrove 7y ago

If you are unattached you should absolutely not buy a home in a suburban area, or anywhere really. Planting a stake in the ground will make it harder to move to chase after better opportunities elsewhere, and that opportunity cost probably outweighs any asset appreciation you would see. Buying a primary residence should be treated as an opportunity cost for the invested money, as well as a necessity for the shelter. If you are coupled it's harder to coordinate big moves so that makes owning more attractive, and if you have children you also want a stable environment for them to grow up in. But all told there are far better investments than a primary residence. Seattle also has a high price-to-rent ratio: https://www.mashvisor.com/blog/best-real-estate-markets-price-to-rent-ratio/ https://www.mashvisor.com/blog/best-real-estate-markets-pric... You may actually lose money on a cash flow basis if you buy.

ghaff 7y ago
>If you are unattached you should absolutely not buy a home in a suburban area, or anywhere really. That's nonsense. You shouldn't feel you have to buy one for financial reasons. But even if you're unattached, as I was when I bought, many of us like having a place of our own with more room than an apartment that you can change as you see fit. Yes, it limits mobility to a degree. But I've changed jobs several times since I bought my house.
- jackcosgrove 7y ago
  I overstated it because I was assuming a certain motive (financial), which as you pointed out may not be present. But as a young, unattached person mobility is one of your top competitive advantages in the labor market. I'm not talking about switching jobs in the same metro. I mean moving to an entirely different metro.
  - ghaff 7y ago
    It does depend upon where you live to some degree. I wasn't that young (late 30s), was in a metro with a fair amount of tech (Boston) most of which was out west of the city where I already lived and worked, and had pretty much already decided I wasn't interested in moving to the Bay Area. Sure, circumstances could have changed but I pretty much bought when I did in part because I decided that mobility wasn't that big a deal for me any longer.

ghaff 7y ago

TBH, those are the sorts of things people should be thinking about with respect to home purchases. Yes, there's a financial angle but that includes a lot of unknowns. Factors like mobility, proximity to work/entertainment/friends, time associated with upkeep (especially for standalone properties), etc. are probably what a decision should hinge on.

Simulacra 7y ago

YES. You should absolutely buy as soon as possible. I went through this when I was 30 before I got married and wished to hell I'd done it sooner. 1) You don't need to put down 20% anymore. If you have a W2 job and good credit, you can have your loan backed by the government in what is called an FHA loan. 2) Think of home ownership as putting a stake in the ground, but not being tied to that stake. You may only live there for a couple of years. You get a better job, get restless, that's ok. Move! You can rent out that house or sell it and pull some of the equity out of it. 3) Prices keep going up. Buying lets you lock in a fixed monthly rate, removes the fear of rent increases, etc. Heck get a condo and live downtown, live anywhere. Buying means taking control of your living situation and not having to be at the mercy of others.

awinder 7y ago
I agree with your point but disagree with some facts if you will allow some extra, potentially helpful information: 1. You can get into a house with good credit and 5% with private mortgage insurance. PMI goes away at 20%, fha you pay the mortgage insurance for the full term unless you put down +10% and wait 11 years. But you can always refi out of an fha loan, just compare your options because fha mortgage insurance is very expensive. 2. The break-even with financing costs usually means you’ll want to own for at least 7 years. If you know/heavily think you’ll be in a place for less than that and you don’t wanna rent it out then maybe don’t buy. 3. Sometimes prices go down tremendously. But you do lock in a payment, that you can make go down over time. Whereas rents tend to go up over time, or you incur expenses like moving or security deposit lockups etc. Personally I’ve found one of the greatest benefits is that I control the destiny of the property. Every place I rented, the owner did not invest in the property, fixes to problems were done at least immediate cost (long term costs be damned!), etc. Now I can maintain the stuff that can break down well, get ahead of problems, and save a lot of my own time and prevent discomfort. Which is hard to put a price tag on.
im3w1l 7y ago
"Asset management firms are required by the Securities and Exchange Commission to say that past performance is no guarantee of future results"[0] I do agree with your other points though. [0] https://www.thebalance.com/past-performance-is-no-guarantee-of-future-results-357862 https://www.thebalance.com/past-performance-is-no-guarantee-...

latencyloser 7y ago

I'm about your age, I also live in Seattle. Though, I do have a partner and a dog so that makes some difference. I chose to buy a home and I'm quite happy with it overall. It's a good place to have people over since it's much larger than the average apartment, I don't have to move every year or so to fight the rising rent, I have plenty of space for projects and storage of various hobbies. My family doesn't have to stay in a hotel when they visit because I have a spare bedroom now. I've also learned a ton of skills related to home ownership such as basic construction, electrical work, etc. which can be a plus if you're into that sort of thing. I prefer the quiet of the suburbs as well. That being said, my commute is atrocious. It's about 1.5hrs each way into the city. Even so, I feel it's worth it. But obviously may not be for everyone. Personally, I wouldn't look at it as an investment. It's more a lifestyle thing that you've gotta think you'll be happier with. My mortgage is the same as my rent was at the time, so I thought I was netting out just fine, but houses have a lot of expensive maintenance events that pop up and will put you in the red pretty quick if you're not careful. For example, my heat pump and furnace went out recently which will set me back several thousand to fix. So, while you're building equity in something, there is a hidden cost with that. Worth being aware of. Hope that helps.

murph-almighty 7y ago

Vaguely similar boat! Northern NJ though. I'm 24 and became single about 6 months ago. After this happened, I moved out of my family home to rent closer to work, which cut an hour off my commute. It's been a mixed bag financially and I've been borderline paycheck-to-paycheck (I do max my 401k, so it's more of a self-wrought liquidity issue). My thoughts: - I'm really getting punched down by the 20% down payment standard. I know PMI is a thing, but it's a fee that I'd like to avoid paying in addition to interest. Assuming 20% is enough to avoid PMI, even if I snag a 600k condo I need 120k down to not have a PMI. - I don't entirely know that I'd like to commit to this area, but I know I want to buy at some point, and I'd like to believe that snagging a property sooner than later will at least give me some leverage for a future purchase via the equity in the property. One of my friends bought a studio in FiDi for similar reasons- he'll probably break even in the `rent v buy` scenario but will at least have some sort of fund to fuel his next purchase via the equity in the apartment. - This is also a game of forecasting your income for some period of time. I'm in software development, which seems stable for now (I hope), so I'm pretty confident in my ability to eventually pay off a high mortgage. In the end, I have no hope of buying a place right now, all I can really do is shove money into a MM savings/mutual fund and wait around until its worth enough to convince a bank I'm worth their time.

jackcosgrove 7y ago
> I'm really getting punched down by the 20% down payment standard. I know PMI is a thing, but it's a fee that I'd like to avoid paying in addition to interest. Assuming 20% is enough to avoid PMI, even if I snag a 600k condo I need 120k down to not have a PMI. Ask lenders about what's informally known as a "piggy-back loan". You can put 10% down, then get a second lien withdrawing that 10% and putting it towards the 20% number. That can avoid PMI, but be aware that the second lien will have worse terms, often with a floating rate, than the first so it's definitely in your interest to pay that off really fast. These were abused during the housing boom but they're not intrinsically bad. It may be preferable to paying PMI depending on how quickly you can pay off the second lien and how disciplined you are with money.
- kmano8 7y ago

JoshTriplett 7y ago

I took a long time looking for a home, precisely because I was unwilling to accept a long commute. Buying a house is not worth a 45 minute commute. Leaving aside the considerable additional expenses of commuting, and the missed health benefits of a 20-minute walk every day, you're now talking about spending 70 extra minutes per day commuting. That means 5 hours and 50 minutes extra commuting per week (total of 7.5 hours), or about 12 extra 24-hour days of your year spent commuting. You currently live 10 minutes walk from work. Don't move to 45 minutes drive/bus from work. That's a substantial chunk of your life you won't get back. And as other replies have pointed out, in the area you're in, owning may not be a win for you.

leetcrew 7y ago

from a financial perspective, neither renting nor buying is inherently better than the other. in a particular locale, one or the other might be better based on the price-to-rent ratio. so the decision of whether to rent or buy similar properties in a particular locale comes down to the local market, how long you can commit to staying, and your tolerance for different risks (rent increase, home repairs, suddenly needing to sell early). you're not really deciding whether to rent or buy though, you're deciding whether to live in the city or move to the suburbs, which is ultimately a personal decision. for the financial aspect, these articles might be helpful: https://affordanything.com/is-renting-better-than-buying-should-i-rent-or-buy/ https://affordanything.com/is-renting-better-than-buying-sho... https://www.getrichslowly.org/rent-or-buy/ https://www.getrichslowly.org/rent-or-buy/

LanceH 7y ago

Figure out what it would cost to really move into that house. Full mortgage payment with taxes and insurance, plus increased utilities, plus maintenance things like lawn care, HoA dues, etc.. Figure out that total and continue living where you live, but save the difference between living in a house and living at the location you want. All of a sudden a year passes and you have $15k in the bank and you've been walking to work in 10 minutes. As time passes you may find that you have enough saved to make a purchase a bit more luxurious (closer, bigger, whatever you like) than you could before. Or you may find that you like seeing that $15k/year that you now recognize as coming from not moving. I mostly do this with cars. When I pay one off, I keep that car payment going into our "car savings" account. I'm allowed to pay maintenance from it, but that's it. It's amazing how attractive a used/paid off car is when you see the savings against the alternative.