When we reach the age of majority, there is a time when we all fly from the nest. When first starting out, we might call home a dorm room at college, or home might be an apartment with roommates. But it's home . . .
We cross another threshold -- we rent an apartment or house. And here's the rub . . . if we're not going to live in Mom's basement for the rest of our lives, there are two -- ONLY TWO -- options of paying for the roof over our head (i.e., home).
PAY RENT ~ or ~ PAY a MORTGAGE
That's it!
I bought my first home when I was 19. I married (young) and my then (now ex) husband had been in the Army, and had VA benefits. We made use of the no-down loan programs available! At that time, and for us, it made sense. We were either going to pay rent for a comfortable home, or a mortgage.
There are some advantages to owning a home, and there are some disadvantages. Donne's post goes further into this. And buying is not for everyone. But, if you can buy, and want to buy, or are thinking about your own home . . . plan now. If you need some time to set yourself up financially -- or pencil out the cost of a home purchase -- start to PLAN NOW!! If there is an opportunity for you to find a home which was otherwise priced outside your price point -- it is a good time to revisit the notion of home ownership.
It's easy to understand that there is CONSIDERABLE reluctance to buy now. We hear about short sales, foreclosures, job loss, the banksters wrecking havoc on the real estate market . . .
No one wants to be caught up in a declining market. Again, referring to Donne's post . . . if you think of a home purchase as a stock investment -- yeah, it's even scarier.
A home is where you live! And if that's a dorm room, a shared living apartment with roommates, and yes -- even Mom's basement -- it's still home.
Buying a home might not be right at this time. And, unfortunately, for millions of Americans who have lost their homes, it's a heartbreaking reminder, and no one should ever forget what so many have gone through. And what millions are facing!!
Try to stay positive and upbeat during this bumpy ride.
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Carla, Thats exactly what I always say. A House is just a building. A Home is much more than that. I remember being about 6 years old and living in Army housing with my Mom & Dad and I remember being taller than the refrigerator at 6! It Didnt matter though, that was HOME.
Hi Carla, I just had this same conversation with my neighbor while he was moving out of their home which they lost to foreclosure. Home is where you live regardless of ownership. They're renting now and actually found a nice place with more ammenities than their home....but, they can't wait till they can qualify and own their own place. jay
Carla, there is the old saying Home is where the heart is. For some that is a cardboard box, for others a McMansion. We each have to find what works for us and what works for us today may not be what is right for us tomorrow. Some times we have to smack our heart around a bit to get in line with where we are :)
Donne made very good points and so do you. You really do have only 2 choices, to rent or buy. Buying home is a scary proposition, but it is a good time to buy now if you can swing it
Hi Chris . . . thanks for sharing that childhood memory. Yes, billetting can be a challenge, but the fridge at your level -- hmmm . . . Mom couldn't place things out of reach!! My mom did. And by the time we moved the chair close, we were always busted. ;-)
Hey Jay -- your neighbors have the right set of mind, and sometimes it's hard to keep smiling . . .
Hi Charles . . . YES! We do have to give our hearts a shake sometimes.
Hey Jane -- Donne's post is excellent. And, absolutely. Buying can make sense to many folks now. For me, when I was younger, it made sense to use the VA benefit we had.
Great post Carla. If you're buying now its a great opportunity for home-ownership, but no matter where you live or the circumstances your "home" is where you live. Good reminder for all of us.
Carla - Wow, you brought back memories of buying my first home 25+yrs ago. Hubby (the first one) and I put 10% down, we had a double digit interest rate and it was a small 2bd/2ba, back unit of a duplex but we were ecstatic and grateful to have been able to get it because it was in a great neighborhood. How much we were going to make on it when we sold it never occured to us. We were newlyweds and it was our love nest. Fast forward 20yrs and hubby (the second one) and I buy our dream home and once again, never considered it an "investment". It'll be the last home we live in, we'll die here.
Lots of very intelligent people try to time the market-stock and housing-it's tough to get it just right. With the prospects for steady income, good credit scores, and a financial cushion, it's tough to think of a better time than now to buy a home.
Carla - It amazed me how many used their homes as piggy banks a few years ago, and now how many consider their homes as a bad investment. I'm not trying to sound insensitive, but we cannot have these types of attitudes towards our homes.
Carla, thanks for your sensible outlook towards housing (whether you're paying rent or paying a mortgage)...and I agree with Catherine in comment #12 above about the media.
I bought my first home at age 20 so we are very similar :)
I have a declining market scenario post coming out shortly. I just need to structure it just so that I don't scare people.
Hub and I are six figures upside down and we are still looking at it as a home and not a piece of stock. I understand there is a breaking point for many so I cannot judge as someday I could be in that situation.
Carla, Really appreciate how you structured this post and certainly brings back memories.....my first apartment was the upstairs "attic" of an older home and the only place you could stand up was in the middle of the three small rooms..$40.00 a month! Ahhh, memories!
Nice path you led us down here Carla ! It is a daunting prospect for many considering buying right now, but this is the exact time when many many people will make GREAT choices that will positively affect their lives from here on - like locking in a 30 year mortgage at 4.5% right now !! But if that's not on their cards right now, then yes, under that roof, lies your home ! Cheers Carla !
Obviously we need to be wise about our finances and purchases, but at the end of the day....buying a home is always about security and a homebase to me.
Great post. Many people are scared to take the next step now but as you advised, you have to begin planning ahead! Think it thru & be sure it is right for you & your family (future family too!). Anything that you purchase, stocks or homes, do not have to go up in value. People are just understanding that now with reluctance. It's not a good ATM machine either.
My mother once told me that it takes about 6 months to really feel ok somewhere, but if you were there a year it would be home sweet home and somewhere you'd miss most of the time if you looked back on it. I completely agree with her and you, and even my first rental at 18 years old which was a mobile home in a town of not more than 1000 people I called home. Thanks for the post Carla, I always enjoy reading what you have to say!
I see lots of comments here that indicate there are reasons to consider buying right now but few reasons given. Those reasons were what I was looking for on a recent blog post http://activerain.com/blogsview/1823392/is-there-reason-to-buy-a-home-or-should-we-all-quit- I thought a compilation of sound reasons would be a benifit to us all. Here's hoping for a few more responses
Carla - It's not surprising people are scared about buying a home right now, even though it IS a great time to buy one.....bargain basement interest rates, high inventories, and soft prices means you probably won't be able to get a deal like this again in our lifetimes.
So why are people so scared? Because the unemployment rate is around 10% and expected to go higher....doesn't exactly give people the warm fuzzies when many probably wonder if their jobs will be next....then there's the whole gangster bankster brigade who have pretty much guaranteed people will never trust lending institutions again. Then one only has to watch the short sales, foreclosures, and bankruptcy numbers stack up....and it's hard not to see yourself ending up as part of that nightmare bandwagon.
And if you ARE blessed enough to be in a position to buy a home, and have the chutzpah to move forward with the process, of COURSE you should worry about it losing value before you even get to the closing table! Sliding home values in many areas can make buying a car seem like a better proposition...after all, homes never used to be considered depreciable assets... and if that's what they are right now in some markets, then you damn well better negotiate a price that doesn't put you in the negative on closing day. Or, if that's too much to ask, renting could very well be a good option til things even out. Or, if you are intent on buying a depreciable asset but not completely losing your shorts, then dang it, go get yourself a Ford Escort and some comfy blankets and move right on in! :)
I like to think that people will know when the time is right for them...but a little encouragement never hurts. I especially like the comments from people above. Some people do get very lucky at times, but sometimes people need to also realize that the perfect time to buy really does not exist in my opinion. There are people passing up some great deals right now and maybe they will get a better opportunity in the future, but maybe it will be very similar to what they can get right now. Hindsight is always 20/20, but forsight is a bit trickier.
Carla, Thanks for this post. Even in declining market conditions, buying a home can still make a lot of sense for a lot of people. For people coming to me that aren't sure, I counsel with them and help them to be look at their short and long term circumstances and goals and make sure that owning fits their own situation even if the market doesn't turn around right away.
Thanks for sharing your story and the great post! I agree with you 100% and have been telling the story of owning a home as a place to live for quite some time. It's amazing to me that owning a home became an investment that was used as a checking account and now that all of that has changed, Americans stall when it comes time to buy. Owning a home is the American Dream and is so affordable right now. I only wish that everyone felt that way!
Hi Lee & Carol . . . thank you for you comment, it sum the post up nicely ;-)
Hey Donne -- great story, and puts our to posts together nicely. A home wasn't an investment for so many years -- it was a home!
Hi Wayne . . . you're right, timing seems to be the key now.
Hey Todd & Devona -- what is really amazing are the financial geniuses who approved the loans in the first place! No one would have been able to play piggy bank if the person with the money didn't allow them to!
Hi Terry . . . the pride of ownership, yup!!
Hey Catherine -- don't get me started on the media ...
Hi Leilani . . . thanks, and to reiterate ... don't get me started on the media ;0
Hey Renee -- We were mavericks! I'll read you're post (I subscribe!)
Hi Deborah . . . How tall are you? LOL
Hey Cheryl -- me too!
Hi Michael . . . owning your home, especially if you're a female, is not even possible is some countries in the world. I take great pride in owning, and that I am able to buy as a female!
Hey Patricia -- you said it!
Hi Richie . . . good to know
Hey Lori -- well, if you knew the rest of the story, you might not think I was so smart! LOL
Hi Russell . . . unless it's an investment, then it's home alright!
Hey Sheldon -- you summed it up nicely!!
Hi Karen . . . I made a comment on a post (forget which one) about renting, it can be very taxing.
Hey Lyn -- yes, we see the reluctance now and we may for several more months.
Hi Joan . . . a home is a place to create memories, and if a person/family rents it's still a home too ;-)
Hey Hercel -- this post wasn't a puff piece about it being a good time to buy. Perhaps that's why there's no reasons given. Not sure why you linked your post to this at all.
Hi Coleen . . . your comments are great!! A post in, and of, itself. Personally, your comments do more for rounding out this post, and gives a much better outline of the nature of the beast . . . than does the drible, oh, what the heck -- DRIBLE --found in the above commenter's post.
Hey Pat -- exactly.
Hi Carrie and/or Kathy . . . they've been saying it for a while now, and for a reason.
Hey Gene -- absoultely. Investors are not looking at a home purchase for themselves. I've had homebuyers looking at places as "investors" and they totally miss the mark -- more of what Donne is taking about in her post.
Hi Josh and/or Julie . . . I suggest you take your comment and expound on it, and write a post! This is really a good topic, and I concur. Thank you for the comments!
Hi Lisa -- you hit the nail on the head. We need to counsel them about the home purchase (or sale) if their current financial position will find things favorable.
Hey Jan . . . I don't use the "American Dream" term anymore. It's overplayed, and for millions, that dream has turned into a nightmare.
What new buyers need to focus on is not whether the home will gain or lose in value - but whether they can comfortably afford the payments on their current income. As you said - it's a home. It's a place to put down roots and build memories. And it's a place to call your own.
And, when locked into a low interest 30 year loan, those house payments will become less and less expensive compared to renting in years to come.
Of course, they should also consider whether they plan to stay in the community long-term, and whether they're ready to take the responsibility of caring for and maintaining a home. Some would rather call the landlord.
I agree completely. We have so many buyers in our market that are buying homes they don't really like because it is a "deal". If I wanted a "deal" and didn't care about my house I would just rent a hole in a wall somewhere!
I think we've lost sight of what you're saying in our society partly because of the 'financial gurus' talking non stop about a home being a liability. As if a lease isn't a liability. You're right - there's only the two choices. Oops, forgot one - living 'on the dole'.
Carla ~ I use this slogan, "A house is not your home until you make memories in it" or as a caption under a family picture" Memories like these make your house a home".
It must be a pretty good slogan because I have shared it with others who have then used it or a similar slogan on their business cards or in advertising.
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After reading Donne Knudsen's post: 
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Carla, Thats exactly what I always say. A House is just a building. A Home is much more than that. I remember being about 6 years old and living in Army housing with my Mom & Dad and I remember being taller than the refrigerator at 6! It Didnt matter though, that was HOME.
Thanks for sharing.