Photo-Illustration: by The Cut; Photo: Getty Images
Homeownership: It’s the dream! But it can also be an expensive gamble, a headache, and a major long-term financial commitment that leaves you strapped or stuck in a job (or a house) you hate. For plenty of people, renting is a better option, but they may not realize that until it’s too late. Here, three people share their regrets over buying into the hype.
When I was younger, I envisioned that having a house meant having friends over whenever you wanted for dinner parties, that sort of thing. But we never have people over because it feels almost rude to bring them in here.
We bought our home and moved in about three years ago. I met my wife during the pandemic, and back then, I was living in Washington and renting an apartment. She’s from a small town near where we live now in Colorado, and she wanted to move back. I didn’t think we’d be able to qualify for a mortgage — it just never occurred to me that I might be mortgage-worthy — but they ran our credit scores and said “yes.”
We figured we could make our money go much further if we bought a house here in a small town, which was obviously true. But our job opportunities are not great in this area, so we’re making less money than we could if we were in, say, Denver or Portland. I work for a local resort, making $52,000, and she works remotely for a nonprofit, making around $40,000.
Our house cost about $260,000 — it was the cheapest we could find — and it needs a ton of work. We made the mistake of thinking we could do a lot of it ourselves, but we drastically underestimated the amount of time and expertise involved. We also had no idea how expensive contractors are, and we spent pretty much all our savings on the down payment and closing costs. So we’re just living in a mess. We have leaks. The roof seemed fine when we bought it, and it was redone around ten years ago, but every time it rains hard we get puddles. I’m afraid it’s going to create a mold problem, but I just can’t let myself think about it. We have two bathrooms, but one of the toilets stopped working about a year ago. And in the bathroom with the working toilet, the sink doesn’t work — which we knew when we moved in but thought would be easier to fix. We bought a new toilet a few months ago, but we haven’t been able to afford a plumber to install it, so it’s on our front porch. The porch isn’t in great shape either — it’s sagging a lot — which makes me worry that it may collapse under the toilet. It would be embarrassing if it wasn’t so funny.
Whatever we’ve been able to fix ourselves, we’ve done. We cleaned the house and painted it inside and out, which was a lot of work. The house wasn’t even clean when we got it. That’s how crazy the real-estate market was — you could put a dirty house up for sale and you’d still have buyers lining up. I doubt that is still the case.
Monthly, our housing costs are about $1,900, including mortgage payments, taxes, and insurance. Which is pretty good, I know — when we bought the house, I was like, “That’s a good deal!” But I didn’t factor in all the extra stuff that adds up. Heating and water is at least $100 a month. We suddenly needed a new fridge, which cost around $700; we’re still paying for it. The $8,000 closing costs. We have to pay for garbage pickup. I took a chunk out of my 401(k) to cover our down payment, about $10,000, which you can do without tax penalties for your first home. Now we’re trying to rebuild our retirement savings — I think there’s about $4,000 in mine — but it’s hard when there are a lot of competing priorities. I’m pretty sure I’ll never retire.
We’re both still paying off student loans, and I have some credit-card debt. We share one car. It wouldn’t take a lot more money for us to live much more comfortably. Like, if we were making $10,000 to $20,000 more between us, we could afford to fix a lot. We’d be able to pay off our credit cards and maybe even buy a plane ticket to visit our families, which we haven’t done in years. It’s just wild to me that we both have pretty decent jobs and this crappy house is still more than we can afford. I fantasize about when I lived in an apartment and I could just call the super and he’d come fix something. Sure, I’ve lived in some dumpy places, but I always had toilets that worked. I love my wife and I’m proud of the life we’ve built together, but the house takes up so much stress and time, and financially I have no idea if it will ever be worth it. People have suggested renting it out during the ski season, but where would we go? And there’s no way anyone would want to stay here with the house in this condition. Maybe someday we’ll be able to do that, I hope.
I wanted to buy a home in my early 20s because I was so disillusioned with renting. I’d read a lot online about how it prevents the accumulation of intergenerational wealth. I came from a pretty poor upbringing; my parents never owned a home. I was focused on creating more stability for myself and, hopefully, for a family someday.
I make between $27 and $40 an hour as a tech consultant, and I do a couple of side hustles when I need to, like Instacart, Uber, and Lyft. I bought my home about a year ago, after years of very careful planning and living with my aunt to save money; she charged me rent but only about $300 a month. I had a good mortgage officer, and we got my loan through even though it meant I had a 49 percent debt-to-income ratio because of my student loans — basically half my salary goes toward my mortgage and student debt. To qualify for a mortgage, you usually need to have closer to 30 percent, so things were really tight. I had to make all these spreadsheets tracking my sources of income over two years, which is hard when you do side gigs, but I did it. I have a 30-year mortgage with payments of about $1,400 a month, which is a real stretch sometimes. I still owe $38,000 in student loans.
I was thrilled when I got the keys to my home. But over time as I’ve continued to become more educated in personal finance, I’ve realized this wasn’t a great decision. I could be paying considerably less in rent each month, especially if I lived with roommates, and I’d have a lot more freedom to move if I wanted. And paying my mortgage leaves me almost nothing to invest in other ways. If I had just put my money in the stock market instead of buying a home, I’d be a lot richer. Sometimes when I’m stressed about money, I play around with compound-interest calculators to compare how much I could have made in the market versus how much I’ve paid toward this house, including the $10,000 down payment and closing fees. The market has definitely gone up more than the value of this house, that’s for sure. If I were to do it over, I would wait to buy a home until I was older, ideally partnered, so I could still invest my money while sharing homeownership costs.
I try not to torture myself over it. Maybe the stock market will crash and this will become the greatest investment I ever made.
When I bought my home in 2019, I had an extremely high-stress job working at a hospital. I was focused on making my life outside of work as luxurious as it could possibly be to compensate for the fact that my job was so awful. My house was really cute. I lived in this sweet little neighborhood. Everything was good on paper. I had a fancy car. Whenever I went on dates, I was really proud to show them my house. I got all this expensive furniture and good light fixtures.
Then the pandemic hit and my job got even worse. But I’d just bought this house, and I had to pay my $3,100 monthly mortgage bills. I made a good salary — over $200,000 — but I had major student loans, about $130,000 at that point. My home felt like these golden handcuffs keeping me in a job I hated. More than a third of my take-home pay was going toward debt every month.
Finally, about a year into the pandemic, I just couldn’t take it anymore. My hair was falling out from stress, and I was getting panic attacks in my car on the way to work. I got a good therapist and decided I needed to make some major changes. I sold my house even though I knew it was a bad choice financially — the profits I made were mostly eaten up by transaction fees. I did make a minor profit, about $30,000, which I put toward my student loans. Then I downsized to a studio apartment that cost about $1,200 a month. I sold most of my furniture. After a couple of months of looking, I found a new job that I love. I took a major pay cut, almost 40 percent, but I could afford to because I’d reduced my living expenses so much.
My mom was especially horrified. She thought I was making a terrible choice, and she couldn’t understand why I was “moving backward in life.” It forced me to contend with a lot of the ways we’re conditioned to pursue certain markers of success — a nice house, a high-paying job — and realize they weren’t working for me. I had made homeownership part of my identity, and I don’t think that was healthy.
I don’t know if anything would convince me to buy a home again. It’s so freeing to know that I can move if I want to and that my money isn’t tied up in some giant commitment. I love using my extra money to travel or do things instead of saving up for a new boiler or paying homeowners insurance. People make homeownership seem like this huge accomplishment, and in a lot of cases it is, but it’s also a lot of drudgery and pressure.
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