A better way to buy a home

Recently, a young woman asked me how she could afford to purchase a home in the current housing market. (For added stress, she was looking for a house in the Washington, D.C., area). Though she had a high-paying job and money saved for a down payment, she couldn’t make the math work. She worried that the opportunity to build equity was slipping her by.

If you’re also feeling overwhelmed by the current housing market, here’s an alternate way of looking at the path to home ownership.

Let Go of Rent vs. Buy

We have a tendency to regard renting as somehow immature or irresponsible, because buying can help build wealth—but that is either-or thinking. There is no pitting renting versus buying to determine which is the best option. The only question is what makes sense for your situation.

In certain corners of online financial media, you will see the phrase “Renting is just throwing money away!” bandied about as if it were the Truth. According to the armchair pundits, renting is building equity for the landlord, leaving the renter with absolutely nothing to show for their money.

This ignores the indisputable fact that renting puts a roof over the renter’s head. It also conveniently glides over the fact that renters are not responsible for property taxes or maintenance.

Rent while it makes sense. Buy when it makes sense. It’s okay if it never makes sense to buy. Because your rent money is putting a roof over your head without keeping you tied down to one place long term.

Let Go of the “Dream House”

Despite what wall-to-wall HGTV shows may want you to believe, there is no such thing as a dream house. In fact, the surest way to make an expensive home buying mistake is to fall in love with a specific house.

That’s because a house that you have decided you must buy is one that you’re willing to waive an inspection for and make an offer for that’s above asking price. In recent years, these have been common tactics among desperate homebuyers in a heated housing market, which has led to unanticipated expenses and a housing market that remains heated. Though the median home price has fallen to $416,600 from its 2022 high of $479,500, 2023 is still a sellers’ market—which means buyers should be wary of growing attached to any one house.

A willingness to walk away from a potential home purchase means you will always hold the negotiating power. No marble countertops, walkable neighborhood, or ensuite bath will ever be worth giving up that power.

Let Go of the Checklist

House hunters who congratulate themselves for not falling for a “dream house” are often victim to another common problem: an impossible checklist of “must haves.” No matter how reasonable each one is, if you have put together a list of 20-plus necessary features for a house to meet your requirements, you will narrow down the options to basically zero.

It’s better to separate your must-have checklist into absolute needs and nice-to-have wants—and try to find a house that meets all of your needs and a few of your wants. Because the perfect house does not exist, and looking for something that meets every item on your checklist is setting yourself up for failure.

Let go of the Timeline

Many first-time homebuyers think of a house purchase as an item on a to-do list that must be checked off before tackling the next one. There’s an excellent reason why we tend to think of homeownership this way: It has long been treated as a marker of adulthood, and an important step between marriage and starting a family.

Buying a home while single can be seen as an odd move—and single female borrowers can have trouble qualifying for a mortgage. On the other hand, not buying a home before having a baby is often viewed as a mistake. These things are supposed to be done in a certain order, according to our cultural script.

Similarly, buyers can sometimes feel like they have to time their purchase based on interest rates. It’s easy to hustle yourself into an ill-advised home purchase because you worry that rates will be higher in six months, or pass on a house you like and can afford because they’re currently high.

Buying a home is a complex process that relies a great deal on luck. We do ourselves a disservice by treating home ownership as a commodity as easily acquired as a new car. Instead of trying to perfectly time your home purchase, it’s far better to treat it as an option you are open to if the right opportunity presents itself.

The Right House

The right house for you will be available at the right time and at the right price. If any of these is not true, then it’s not the right house.

You can’t force a house to be something that will work for you if it simply doesn’t meet your needs, no matter what the Property Brothers can do in 43 minutes or less.

You can’t get everything you want in a single house.

You can’t make the timing work if you’re not ready to buy.

You can’t use creative math to make a too-expensive home affordable.

The good news is that waiting for the right house at the right time at the right price means enjoying homeownership with no regrets.

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Emily Guy Birken is a Milwaukee-based personal finance writer. Her books include: The 5 Years Before You Retire, Choose Your Retirement, Making Social Security Work for You, and End Financial Stress Now.