DEAR BOUNDLESS ANSWERS

I'm 22 and have a well-paying job. Despite your strong stance on single females not buying homes for moral reasons, won't you at least concede that it's a smart financial move for single women to buy instead of rent?

REPLY

That depends.

When my husband and I bought our first house seven years ago, interest rates were near their historical low and the value of our home, built in a new neighborhood, skyrocketed. We were shocked by how quickly we accrued equity. In only five years, we were able to sell for nearly $100k more than what we paid. So what did we do? We assumed the hot housing market would continue and bought a bigger, more expensive house. That's when the rates started going up. Suddenly we were nervous. We knew we'd bought more house than we could afford and that if we ever had to make the "real" payment, not the one on our boutique interest-only loan, we'd be in trouble. So we downsized.

The lesson we learned, at some considerable cost, is that any financial investment that's beyond your means — no matter how hot — is unwise.

And homes cost more than just the mortgage payment. Yes, in some markets, you may be able to find a home with a monthly mortgage payment that's close to your monthly rent. And yes, mortgage payments are tax deductible. But the costs of maintaining a home, which includes paying for all the upkeep and repairs out of your own pocket, establishing and tending your landscaping, hiring your own trash collector, and a myriad of other hidden costs, are almost always more than renting. Remember, what your mortgage broker or banker says you can afford is no guide for what you really can.

And there's the opportunity costs. In many cases it's a lot easier to get out of a rent agreement when a great out-of-town career, ministry or marriage opportunity comes along than it is to sell your home. The logistics of owning a home lend themselves to permanence. They tie you down, right at the season of life most characterized by discovery, exploration and change — hopefully with the biggest change being getting married and starting your own family before the decade's over.

It seems I'm not the only one saying homeownership in the career-building, family-forming 20s decade isn't always the best idea. I was surprised to come across just such advice in the Wall Street Journal just this week. Granted, the author wasn't saying anything about the morality or wisdom of single women buying their own homes — in this case the advice was gender neutral and purely financial. But since so many of my detractors on this issue argued exclusively from the point of stewardship, I think what columnist Jonathan Clements had to say is worth noting.

In "Keeping Your Financial Footing at 22 — So You Can Buy That House at 32," Clements says the biggest financial challenge for twentysomethings is getting out of, and staying out of, debt. According to the article, 73 percent of graduates from four-year colleges owe an average of $19,400 in student loans. Add to that the average credit card balance and it becomes for many, a "mighty struggle" to stay out of debt. Clements says the best financial strategy for such circumstances is to pay off the credit cards and practice living within your means. He also advises saving for that down payment so when you hit your 30s, you'll be in a better financial position to buy a home.

The temptation, he says, is to graduate from college and immediately start living like your parents, who've been out of college for 20, 30 or 40 years. That's a surefire way to end up in debt that's over your head.

Better, he says, to spend your "initial working years ... learning to live within [y]our means, pay the bills on time and stay out of financial trouble." His two benchmarks to know if you're succeeding is staying out of credit card debt and avoiding big auto loans.

The most ironic part of all, however, is his final piece of advice: move back home with mom and dad. Again, his reasons — to bolster your bank balance — are far a field of my own, and in most cases I don't believe it's a good path for young men to follow, but it's nice to know I'm not the only one saying it.

Best,
Candice Watters

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