[USER]

Buying a house in this market is insane! As a younger person (early 30s average income) I feel like the choice is invest for the long term and rent for ages OR own a now overpriced home by spending my life savings as a down payment and paying twice the cost due to 7%+ mortgage interest.

What are people’s opinions on buying a home in 2023?

[Hayley]

I bought last year at 28 for 720k in Australia. Depends on what your definition of freedom is. Mine is owning a house outright and having secure living in my retirement!

[Timisha]

We closed on our home 3 months ago at a 5.525% (we used a mortgage broker, not a lender) and here’s what we considered:

1) We have neighbors who rent for the same amount we pay to OWN- owners/landlords are having their WAY with the rental market, and while their rent is going up next year, our mortgage won’t increase.

2) I would NOT want to be a buyer if/when the rates drop, everyone is hawking and waiting for the rates to drop and if/when they do it’s going to be super stressful MADNESS trying to get a home — and we’d probably have to settle on something we wouldn’t love as much as the home we have now.

3) Builders and sellers are offering credits left and right so you can get your interest rate bought down for the next 2 years and if the rates lower, you can refinance for a lower payment.

4) To comfortably afford our mortgage payment with “these interest rates” we house shopped 20% below what we got pre approved for, and we still love our home, neighbors, the community amenities, location, etc.- just because you get pre-approved for “x” amount doesn’t mean you have to go for top of budget.

Don’t miss: Looking for some home buying advice

[Sara]

If you look at rates over the last 50 years, 7 percent really isn’t that high. If you find a house you like that’s within your budget, go for it. If rates do go down, you can always refinance.

If homes in your market are out of your price range, it may be time to consider making a move.

[Rachel]

If you are in the position to buy your forever home then in my opinion it doesn’t really matter if you overpay a little as in the long term you will be better off than renting.

Of course this depends on you being secure enough in your circumstances to know that you definitely won’t be moving for 10 + years and assumes you are buying within your means and will be able to tolerate increased payments with interest rate rises.

If you wait for prices to come down you could be waiting years.

Time in the market is more important than timing the market is just as relevant to property.

[Chelsea]

It just absolutely sucks for low to middle income earners.

You’re priced out of half the US and most major cities. If you buy a place, you’ll have low mobility for years. You’re mainly hoping that interest rates eventually go down within half a decade. At 7% interest rate, you’re paying the original value of the loan in interest every 10 years.

Explore these too: I’m hoping to buy my second home in the next 3-5 years

[Leslie]

I bought a home at 27 last year and ended up having 3 three roommates to help with costs. I’m not sure if your personal situation allows for this house hack, but in this economy, the house is worth it imo.

Not true for everyone, but the rental market here is competitive. I was reluctant to give up a rent controlled apartment in a HCOL area for a mortgage in the suburbs. Everyone told me it was dumb to buy with the interest rates then (6.4%) but it has only increased since. It took me a while to pull it together to see it differently. It was the right move.

I just didn’t see it at the time with everyone whispering in my ear.

[Kirby]

A paid off home is key to a secure retirement. Depends on your family situation and where you want to retire, could buy a place in a lower cost of living area and rent out in the meantime while renting elsewhere and stacking cash.

[Ian Em]

When I bought my first house it felt “insane” to spend 350k on a house, in an unknown and unstable market (2011). Looking back its clear buying it was a great choice, but at the time it didn’t feel any less insane than what you are feeling now. I moved to a new city about a year ago and bought a new house. The purchase price and interest are both double what my first house cost, but it didn’t feel insane.

“Insane” is all relative to your expectations. A 7% rate is closer to “normal” than the “insane” 2%-3% rates people were able to get in the last decade. A 50 year historical window gives you a median mortgage rate of 7.41%

A 3% interest rate is “normal” to you but “insanely” low to me. It’s all relative.

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