9 Home Buying and Homeownership Beliefs \ Myths Debunked
9 Home Buying and Homeownership Beliefs \ Myths Debunked *Disclaimer
This post is not an argument to not purchase a home. This post is intended to challenge commonly held beliefs about homeownership. While reading this post, I encourage you to…
Pay particular attention to any feelings of discomfort, defensiveness, and resistance that may arise and be curious about why you may be experiencing these feelings.
Keep an open mind and consider how incorporating these new ideas into your belief system will help you to have a better understanding of yourself and your decision making process.
Share and \ or discuss this post with a friend or family member to hear a range of perspectives.
Homeownership is Deeply Emotional
Whether you are a first time home buyer, empty nesters downsizing, or vacation home buyers, the decision to be a homeowner of any kind at any time is deeply emotional. First time home buyers may be filled with excitement, envisioning starting and raising a family in their new home. Empty nesters downsizing may be filled with grief, confronting aging or identity loss, or perhaps filled with anticipation, new beginnings and opportunity abundant. And vacation home buyers may be filled with hope, imagining more frequent weekend getaways with family and friends. Interestingly though, societally we rarely discuss how our emotions drive our decision to be homeowners. Rather, we claim our decision to be homeowners is purely rational.
The Homeownership Grass Is Not Always Greener
Oftentimes, first time home buyers are fed-up. Fed-up with their landlord. Fed-up with their roommates. Fed-up with sharing a washer and dryer. The grass on the homeownership side seems greener. However, homeowners are also fed-up. Fed-up with unexpected, expensive repairs. Fed-up with contacting plumbers. Fed-up with squirrels in the garage. Unfortunately, mainstream messages about renting versus homeownership are a one way street - suggesting that all renters would rather be homeowners and that no homeowners would ever want to be renters.
This is simply not true - the grass on the renter side can absolutely seem greener. In fact, home buying regret is shockingly high. According to Experian, 93% of homebuyers in 2023 had regrets about home buying. Even homebuyers who were able to lock in historically low mortgage rates in 2020 and 2021 have expressed feelings of regret, as they feel trapped in the home that they purchased and cannot imagine ever buying a home with a higher mortgage rate. So while most people believe that homeownership is superior to renting, the lived experience of the vast majority of Americans is not that.
Ask yourself…
How did emotions factor into my decision to purchase a home instead of rent?
Do I have any regrets about my decisions?
Which decisions did I make that I still feel very confident in and proud of?
9 Home Buying and Homeownership Beliefs \ Myths Debunked
1. “It’s the American dream.”
While times have changed and homeownership has become increasingly difficult particularly in major US cities, our belief in the American dream remains stagnant. Buying a home is seen as the epitome of the American dream - more so even than obtaining a college degree or raising a family. The initial idea of the American dream is beautiful and well intended. However, just as the constitution needs amendments to reflect changing times and to meet the nation’s needs, the American dream also needs to evolve to take into consideration inaccessible and unaffordable health care and higher education as well as home prices rising faster than wages. Consider how the American dream feels and what it means to you non-materially. Perhaps the American dream is physical and financial safety and security or perhaps it is freedom of self-expression. Ask yourself the following...
What does buying a home and homeownership mean to me?
Why is buying a home and homeownership so important to me?
2. “I will finally be successful once I own a home.”
The idea that homeownership is the be-all and end-all of success is untrue on multiple levels. First, there are many individuals and families that will never be able to afford a home despite hard work and motivation as well as individuals and families that do not want to buy a home. Their inability to buy a home or decision not to buy a home in no way means that they are not successful. Their success may be abundant with or without homeownership. Secondly, success is not necessarily material or physically attainable. Success may come in the form of learning (about oneself or the world), growth, forgiveness, acceptance, etc. Thirdly, homeownership is not included in the definition of success. Societally, we have decided to include homeownership as an indicator of success. Fortunately, this means that societally we can also work together to change this. Finally, success is often a moving goal post. Once you own a home, then you need to renovate the kitchen. Once the kitchen is renovated, then you need a new car. And on and on. Practice recognizing the successes that you have made that do not involve material goods or homeownership. Ask yourself…
What does success mean to me?
Can I be successful without ever owning a home?
Why or why not?
How do those around me define success differently?
What can I learn from their definitions of success?
3. “My parents owned a home at my age.”
If you are a Millennial or Gen-Z, your parents most certainly owned a home at your age. Unfortunately, home prices have risen faster than wages; therefore, holding yourself to a standard that was set decades ago is not only unrealistic but also unfair to you. You deserve realistic expectations. Interestingly, Millennials and Gen-Z do not compare themselves to their parents in other ways. For example, Millennials and Gen-Z do not say “My parents were married with three children by 25 years old, so I should be too.” Rather, Millennials and Gen-Z are getting married significantly later than their parents and the birth rate is declining meaning Millennials and Gen-Z are having fewer children per household with an increasing number of households having no children at all. Consider all that you have done that your parents were never able to do (study, move to another city, travel, etc.). Ask yourself…
How is my generation different than my parents’ generation?
Why do I feel like I have to be like my parents?
4. “I will be happier if I own a home.”
Many people believe that homeownership will automatically make them happier. However, homeownership is a lot of ongoing work, time, and money. Sometimes, the idea of something is actually better than the experience of it. According to the National Library of Medicine, “home buyers systematically overestimate their future life satisfaction”, and home buyers who value success and income “make larger prediction errors about their future satisfaction with life around the purchase of property” than home buyers who value social relationships, family, and experiences. Homebuying in and of itself will not make you happier. Additionally, every decision has financial implications, especially home buying. Assuming a mortgage that is $2,500 more per month than rent may mean fewer annual vacations, less money towards retirement, or waiting to buy a new car. You may feel happy that you own a home and also sad that you are giving up other opportunities. Consider when you have felt most happy in life, and ask yourself…
What were you doing?
Who were you with?
What were the circumstances?
5. “Homeownership is the best investment.”
Warren Buffet, the tenth richest person in the world, has said that renting would have been a financially wiser decision than home buying. Additionally, JL Collins, the godfather of the Financial Independence movement and author of The Simple Path to Wealth, insists that homeownership is not an investment.
He argues that, while rental properties or house hacking (renting a basement or mother-in-law unit or having roommates to help you pay your mortgage) may be investments, primary residencies are not. There are many ways to invest for your future. Consider exploring all of your investment options before jumping into homeownership. Also, many believe that people become wealthy through homeownership. Instead consider that people who own homes already had higher incomes and more wealth than those who cannot afford homes. Correlation does not equal causation. Ask yourself…
Does buying a home help me to achieve my financial goals?
What other investment options are available to me?
How are these options more or less appealing to me than homeownership?
6. “Renting is just throwing money away.”
Renting has so many advantages! To name a couple…
Freedom and flexibility - Renters have freedom and flexibility that homeowners simply do not. Renters can explore living in different neighborhoods, cities, states, or even countries depending on changes in their desires and life circumstances. Renters can break a lease, losing a few thousand dollars at most (some renters can even break a lease without losing any money). Homeowners, on the other hand, break a mortgage, because they want to explore living in a new city.
Less responsibility - Renters do not have to repair their own toilet or fix a broken washing machine. Their landlord or building manager takes care of the issue. Renters also do not have to pay for costly repairs or replacements.
These advantages have a price. A price that is worth paying for many people. Renters are not throwing money away. Renters are simply spending their money differently than homeowners.
Additionally, according to Realtor.com, it is now cheaper to rent than to buy in all major US cities. Renting certainly has its financial and nonfinancial benefits. Read Money With Katie’s extensive breakdown of the financial advantages of renting over buying. Ask yourself…
What do I appreciate about renting?
What worries do I have about homeownership?
What do I miss about renting?
What do I love about homeownership?
7. “If I don’t buy a home now, I’ll never be able to afford one.”
If the Covid pandemic taught us anything, it is that the future is uncertain and unpredictable. We cannot anticipate what the stock market or the housing market will do. What we do know is that home prices, mortgage rates, supply, and demand will all ebb and flow. Home values do not always rise. Natural disasters, recessions, climate change, political legislation, and more can change home values. 100 years ago, St. Louis was the 6th most populous city in the US. Now, St. Louis is the 76th most populous city. Past results are not a guarantee of future results. Ask yourself…
Would I still like to buy a home if the value depreciates?
Why do I believe that I will never be able to buy a home in the future?
8. “Everyone owns a home except for me.”
It may feel like everyone owns a home except for you. However, just 26% of Gen Z and 54% of Millennials own homes. Furthermore, 70%-78% of Gen X, Baby Boomers and the Silent Generation own homes. To break this down, 3 of every 4 Gen Z, 1 of every 2 Millennials, and 1 of every 4 Gen Xers, Baby Boomers, and Silent Gen rent! So while it might feel like everyone owns a home, not everyone does. Consider what is right for you and how that might be different from what is right for someone else. Ask yourself…
What do I feel when I compare myself to others?
What do I feel when one of my peers purchases a home?
How do my peers influence my behaviors?
9. “I need to own a home in order to raise a family.”
First, ask yourself - why?
Children only know what they know - for children, home is home, whether it is an apartment or a house, rented or owned, in New York or Tulsa. Children raised in an apartment are no more or less happy than children raised in home. Children raised in apartments go on to live full, happy, and ‘successful’ lives just as children raised in homes do. Read more about the many advantages of raising children in an apartment in KidSpot and ParentCircle. Ask yourself…
What money messages will my child receive by growing up in a home or an apartment that we rent instead of a home that we own?
What other opportunities am I able to give my child because we rent instead of own?
What did my child-self need most in order to grow and flourish?
Final Thoughts
There is nothing wrong with making emotional decisions - you are human after all!
Awareness and acceptance that you are making emotional decisions is helpful in making future decisions.
Reflect on what is best for you and your family and stay true to yourself.
