Some people aspire to homeownership. Others would rather spend their hard-earned money on experiences and purchases that make them happy.
“Am I crazy for thinking the housing market is cooked and that I’d rather live a little before locking myself into a mortgage?” one Reddit user wrote on a thread about choosing between buying a house and traveling. “How bad is it, really, to delay buying property in my situation?”
A poster in another thread echoed their skepticism. “I live in a rent-controlled apartment right now. I put $1400 per month into my cash savings fund. I take international trips multiple times a year, in addition to pursuing various fun hobbies and local excursions. I treat my grandparents. I treat my parents,” they said. “Is buying a home really worth the lifestyle cut? I can’t fathom that it is.”
Even as price growth slows — and falls in some cities — buying a home still feels unaffordable for many people, in part because mortgage rates remain high and down payments are still steep. Redfin reported in October that the average down payment hit a record $70,000 in August.
While some people are cutting back on discretionary spending to afford a home purchase, many have accepted that buying isn’t realistic, at least for now, and are redirecting what would have gone into a house fund toward trips and other small luxuries that fit their budgets today.
Justin Ghio, 36, and his wife rent a four-bedroom home with a pool in San Diego for $3,895 a month, where they have lived with their twin 9-year-old daughters for the past four years.
Ghio told Business Insider that renting is far more affordable than buying a home in their neighborhood. Redfin data shows that San Diego’s median home sale price was $916,750 as of November.
In 2020, the couple searched for a home in the city and made offers on four different properties. But even with a combined income of about $225,000 — including his job as a talent director and his wife’s work as an esthetician — they were outbid each time.
Ghio said they were initially disappointed to pause their homebuying plans, but he now feels relieved they didn’t stretch their budget to compete.
By renting, the family avoids the costs of repairs and upkeep for the home — their landlord takes care of the gardening and pool service. The savings have gone toward ski trips to Jackson Hole, Wyoming, and their daughters’ activities, including Girl Scouts summer camp and ballet. The budget flexibility also made their November wedding feel more affordable, and they’re now considering a third child.
“I didn’t have to spend extra money on a down payment to keep my mortgage rate attainable,’ Ghio said. “Because of that, I was able to allocate my funds more freely to a wedding that checked all the boxes for what my wife was looking for.”
If you’re not saving up for homeownership, what are you spending your money on instead? We want to hear from you. Email the reporter, Alcynna Lloyd, at alloyd@businessinsider.com to share your story.
Read the full article here
