In the daily mini-paper this morning, I noticed a headline indicating that it’s not a bad time to buy a home – if you plan to stay there for ten years. Admittedly, I didn’t read the article. (I was reading over someone’s shoulder on the metro.) But it did get me to thinking about my own home buying dilemma.
Now, this is not new information. Financial advisors have been saying for years that you shouldn’t buy and expect to sell in two or three years. You might make money on the sale, but you might also lose money, so your best bet is to buy if you’re planning to stay.
Thinking about where I am now, can I honestly say that a home I buy now is one that I plan to stay in? Probably not. In ten years, I would like to have started a family. I can’t afford a family home right now. I suppose I could probably get a two bedroom condo, but that’s about it. It’s moments like this that make me start to rethink the plans to buy. I think some of it is going to depend on whether or not the first-time homebuyer credit gets extended into next year at all (I’ve been hearing rumblings about this, but nothing final). I wasn’t in a position to take advantage of it this year, but definitely could conceivably take advantage of it next year.
I guess it’s sort of a game of wait and see. I’m not good with commitment, and big purchases scare me, but this is something that I should make a decision on sooner rather than too much later.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
They say the average american changes their home every 5-7 years. Making a 10 year commitment with a stat like that is pretty scary. However, I think it becomes easier when you have a family or are ready to have a family. You start to think of it as a place where you can build something. So, if that’s the case, then I would say don’t rush into anything. Really, the market is only as big as the available houses, and what if you don’t REALLY like anything. I guess you could rent it…
It is a pretty big purchase. I’m not sure if $8,000 should make the decision for you. Winning the lottery on the other hand…lol.
It’s hard as a twenty-something to make that commitment to a house. I definitely won’t be in the same place in 10 years! But then we’re also told that we’re throwing our money away if we’re renting. It’s such a catch 22!