Friday, November 9, 2007

Don't Rush Into a Mortgage

This morning I heard a surprising statistic. About one-quarter of people under the age of 25 are homeowners, according to an interview I heard on NPR this morning with author Shira Boss. The author of Green With Envy: A Whole New Way to Look at Financial (Un)Happiness argues that the burden taken on by homeownership can often outweigh the benefits. She talked of how homeowners constantly pour money into improvements: from small things like painting to larger improvements like re-roofing. The cost of these improvements can outweigh how much one makes on the sale of the house, espeically in such a poor real estate market today.

I'd sort of always been taught that investing in real estate was a "sure bet," and have lately been proven that that isn't the case. What's more, buying a house can lock you into jobs or locations that you may not want to be in for a long period of time. Many of us should be used to the idea that, especially in the beginning of our careers, we're often not in jobs for more than a year. What's more, when a mortgage comes into play, you can never take a pay cut. If you get laid off, you're in severe dire straights.

I for one am a renter. Although my family has encouraged me to look into ownership, I'm reluctant to lock myself into that investment. Who knows if I'll be in the DC area for a long time?

Cross-posted at

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