Call in FOMO. With mortgage interest rates at historic lows, home sales are robust in much of the country. Low interest rates certainly make a home purchase more affordable, but is that a reason to buy a house?Before you call your real estate agent, the first question to ask yourself is “Was I already planning to buy a home?” Buying a house is so much more than a dollars-and-cents decision. When you pay rent you are paying for freedom — freedom to move about, freedom from the responsibilities of maintenance. Buying is a signal that you are putting down roots in a particular place; is that a commitment you are ready to make? Is it possible that you will want to relocate for your career in the next few years? In most markets, you will need to hold on to that house for at least 5 years, quite possibly more, before it has increased in value enough to compensate you for the upfront cost of purchasing, as well as interest and other expenses.
I get it. Everyone you know seems to be buying a house and isn’t that the American dream? No, it is not. The dream is to have a safe, stable home that you can afford. Renting is not a compromise; it is a sound choice when home ownership simply does not fit your goals.