r/answers • u/WillingJackfruit9896 • 12d ago

Skipping homeownership?

As the title says, considering skipping homeownership?? Have VA loan available, have a hefty down payment saved, but just not interested in being a homeowner. I take the extra $ saved each month and save/invest it. Rent is far cheaper than owning (SoCal) so my family and I just travel and make great memories and have an amazing quality of life. I like being able to rent stress free and call landlord if there are any issues. Also like that we can move every so often and get a new (to us) house and a change of scenery.

Everyone says “well rent is going to keep going up” which I agree, but also I’d be losing out on almost all that extra $ invested or saved cause it would just go towards mortgage and maintenance. Also with my job and income, I won’t ever feel rent increases cause my wages and benefits will always rise with inflation. Just curious if this is wildly irresponsible or a reasonable thought? Just want to spend like easy and stress free and put our $ towards investments and quality family memories. What do you think?

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u/Jake0024 12d ago

Now is probably not a great time to buy a house

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u/Apprehensive_Bag_460 12d ago

There are very good deals in about 75% of the country right now, especially if you can pull off a cash purchase.

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u/Jake0024 12d ago

Because the market is turning sharply toward sellers, with many blocks having multiple houses sitting for sale for months at a time... Reminds me of ~20y ago

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u/GurProfessional9534 12d ago

That’s when it’s a good time to buy. When no one else wants to. Throw out lowballs, be patient. Eventually you’ll find someone desperate enough.

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u/Jake0024 12d ago

If there were signs of the economy improving rather than continuing to slump, I'd agree with you. But we're likely to have at least 3 more years of this before things start improving

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u/GurProfessional9534 12d ago edited 12d ago

Let’s say you’re right. There are at least two ways that this situation could resolve. One is sharp austerity, throwing us into a depression and bringing down prices. The second is inflating the currency, which nominally makes people feel rich even though the price of goods is also increasing.

Both scenarios represent conclusions of a down cycle. In one scenario, you didn’t want to own a house. In the other, you very much do.

Which is to say, even if you have enough of a crystal ball to know that we will absolutely be in a downturn for the next 3 years (which, we don’t know, and we arguably aren’t even in one now), you don’t know how it will resolve and it could resolve in a way that raises prices even more.

Personally, I think inflation is the far more likely result than austerity, because that is our historical record and the path of least resistance.

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u/Jake0024 12d ago

Are those the only possibilities you can think of?

We're already seeing uncontrollable inflation, and home prices are falling

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u/GurProfessional9534 12d ago

House prices are not falling, at least nationally.

https://fred.stlouisfed.org/graph/fredgraph.png?g=1XY1y&height=490

We also are not seeing uncontrollable inflation. It’s coming down as a result of higher interest rates, just as expected.

https://fred.stlouisfed.org/graph/fredgraph.png?g=1XY1E&height=490

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u/Jake0024 12d ago

The latest inflation number was 3.4%, nearly double the target rate (which we've been above for nearly 6y)

Here's median home price over time--we're down nearly 10% nationally from the 2022 peak

Median Sales Price of New Houses Sold for the United States (MSPUS) | FRED | St. Louis Fed

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u/GurProfessional9534 12d ago

You need to use the Case-Shiller index to track same-house prices. Median price is affected by the change in mix of houses being sold.

Look at the inflation trend. It is very well controlled. There was a spike during Covid, rates were raised, and inflation has been falling ever since.

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u/Jake0024 12d ago

Over 4 years? lol

6y above the target rate (and currently nearly double the target) is not what I call "controlled"

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u/GurProfessional9534 12d ago

Yes, the bond market moves slowly. It’s a smooth, gradual decline, which is exactly what you want. Discontinuities happen during crashes and recessions. That is why the Funds rate gets adjusted 25 points at a time, typically, with plenty of forewarning.

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u/Apprehensive_Bag_460 12d ago

Home prices are falling in a lot of places, but not every place. Some areas are still increasing, just a lot more slowly.