Dave Says: Wait Until the Time Is Right

Dear Dave,

Is it even worth it to buy a house these days? I’ve always been told buying a house is the adult thing to do and that it’s a great investment, but I can’t find anything decent and livable in my area for less than $350,000. My wife and I are debt-free, and we’re expecting our first baby in January. I was hoping to get your advice.

— Craig

Dear Craig,

I can understand how things might feel a little hopeless in your current situation. You’re probably feeling the weight of the responsibility a new life brings to the picture. Things are getting real really fast, aren’t they? Believe me, I get it.

The truth is you may not be ready to buy a house today. And that’s okay. Having a new baby on the horizon doesn’t mean you have to run out and buy a home. That little boy or girl isn’t going to know the difference between a house and an apartment for a long time. Right now, giving your child a safe, loving environment is the most important thing.

Now, looking down the road, is owning a house worth it? Yes. But it’s not worth doing it at the wrong time or in a stupid way. You first need to make sure the income is there. Then, you need an emergency fund of three to six months of expenses in place along with a strong down payment. So, what if you don’t buy a home for another two or three years? Home buying should always be done with patience and wisdom.

There are two or three things that make buying a home a great long-term investment versus renting your whole life:

1. 1. Rents go up every year. If you lock in a good, fixed-rate mortgage, that payment will stay the same.
   2. The value of your home will increase. When you rent, you don’t own your residence, and you won’t benefit from the value of it going up.
   3. Our study of 10,000 millionaires showed that most say two things were integral parts of their ability to build wealth: Good retirement investments and a paid-off home.

A house is a great wealth-building tool, and it can also stabilize the biggest line item in your budget—housing.

God bless you guys, Craig!

— Dave