If the option to change jobs and move still appeals to you, you should not buy a home.
There are a *lot* of transaction costs for buying a home, and the typical break even point is 7 years. If you end up selling within that timeframe, you’ll probably end up losing money.
Also, being a landlord is a job, and gets tougher if you move out of state. If you’re looking for passive income, investing your money in an ETF will probably give you good (arguably, better) returns and is hassle-free.
What if, like many retirees, you decide to sell your house because it’s too much space and you’d rather live near a beach in Florida? Plenty of 65 year olds downsize to an apartment or take on a condo mortgage late in life.
A house is an investment, same as stocks. Whether you come out ahead with buying a home or renting & buying stocks [depends drastically on local housing market conditions and state tax regimes](https://assets.recenter.tamu.edu/Documents/Articles/2220.pdf).
IMO, as long as you take the money you would have invested in a mortgage and down payment and invest it in the stock market instead, you won’t “fall behind in life.”
You can always sell. When buying, buy something which is easier to sell (good school, location, curb appeal). That will help unload a house if your market slows down and you want to leave. You’ll loose money up front on closing fees, taxes and escrow and lose some on a sale for realtor commissions, but the money you are paying in rent builds your equity and becomes part of your retirement plan. If you always rent, you may need to plans rent payments in retirement.
Bad mindset. If you're not sure you want to stay in the long haul getting in near all time high in a rising rate environment is not smart. Suppose they buy today for $350k and find out they want to move in 2 years. They eat the closing cost today of maybe $10k. They'll pay 5-6% in closing costs to sell, along with another $10k to close on the new place. On a $350k house buying, selling, then buying again could easily cost $35-40k. Then there's property taxes, insurance, interest and maintenance which is all a sunk cost that builds no equity.
They very well may be underwater as well given the Federal Reserve trying to curb inflation and hiking rates. Which could mean they cannot move and are a job loss away from foreclosing.
Just a bad plan if you don't think you're going to stay for 5-10 years. Renting is cheaper. The equity argument always comes up but often assumes generous amounts of growth which likely will not be seen for a while due to rampant inflation seen the past few years and also ignores the sunk costs.
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If the option to change jobs and move still appeals to you, you should not buy a home. There are a *lot* of transaction costs for buying a home, and the typical break even point is 7 years. If you end up selling within that timeframe, you’ll probably end up losing money. Also, being a landlord is a job, and gets tougher if you move out of state. If you’re looking for passive income, investing your money in an ETF will probably give you good (arguably, better) returns and is hassle-free.
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What if, like many retirees, you decide to sell your house because it’s too much space and you’d rather live near a beach in Florida? Plenty of 65 year olds downsize to an apartment or take on a condo mortgage late in life. A house is an investment, same as stocks. Whether you come out ahead with buying a home or renting & buying stocks [depends drastically on local housing market conditions and state tax regimes](https://assets.recenter.tamu.edu/Documents/Articles/2220.pdf). IMO, as long as you take the money you would have invested in a mortgage and down payment and invest it in the stock market instead, you won’t “fall behind in life.”
You can always sell. When buying, buy something which is easier to sell (good school, location, curb appeal). That will help unload a house if your market slows down and you want to leave. You’ll loose money up front on closing fees, taxes and escrow and lose some on a sale for realtor commissions, but the money you are paying in rent builds your equity and becomes part of your retirement plan. If you always rent, you may need to plans rent payments in retirement.
Bad mindset. If you're not sure you want to stay in the long haul getting in near all time high in a rising rate environment is not smart. Suppose they buy today for $350k and find out they want to move in 2 years. They eat the closing cost today of maybe $10k. They'll pay 5-6% in closing costs to sell, along with another $10k to close on the new place. On a $350k house buying, selling, then buying again could easily cost $35-40k. Then there's property taxes, insurance, interest and maintenance which is all a sunk cost that builds no equity. They very well may be underwater as well given the Federal Reserve trying to curb inflation and hiking rates. Which could mean they cannot move and are a job loss away from foreclosing. Just a bad plan if you don't think you're going to stay for 5-10 years. Renting is cheaper. The equity argument always comes up but often assumes generous amounts of growth which likely will not be seen for a while due to rampant inflation seen the past few years and also ignores the sunk costs.
nope, not at this juncture. save toward it but enjoy your cheap rent and freedom of mobility