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:
- Rents go up every year. If you lock in a good, fixed-rate mortgage, that payment will stay the same.
- 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.
- 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
Dave Ramsey, a best-selling author, personal finance expert and host of The Ramsey Show, can be heard by more than 18 million listeners each week.
