Now is Not the Time to Buy a Home
Be careful before you make a decision that will affect your next 20 to 30 years
I will never buy another house unless I get rich and can afford to pay cash.
There I said it.
If COVID-19 has taught me anything, it’s that life is too unpredictable. Here you are one day, working 40 hours a week, making a living, paying your bills, buying the latest tech on credit, leasing a new car every two years, then, BAM! Pandemic!
You lose your job and have no chance of finding another one. Congress can’t agree on a stimulus plan. Unemployment only lasts a little while, and soon you are three months behind on your first and second mortgage payment.
This happened to me in 2001. I got my dream job in Boston and found my American dream house in the wilds of western Massachusetts. My house sat near the town square, whose white clapboard buildings were something off a postcard for New England. In the fall, when the leaves changed, it was like a fairytale.
The house sat on an acre, and at 2500 square feet, it was a steal for $140,000. It was even a steal after I took out a second mortgage to renovate the place. It even had a swimming pool, and although there were only a few months hot enough to use it, we were proud that we had finally “made it.”
But something happened that no one could have foreseen. The company I worked for partnered with the U.S. Postal Service, and after 9/11, they had no more money to spend on frivolous projects when mail safety was such an issue.
I lost my job in the second round of layoffs and left to find a new one where there were none. Add to that a mental illness that only worsened afterward, and you have a recipe for disaster.
We lost everything — the fairytale home, cars, all the stuff we had bought when times were better, the swimming pool — everything was taken away in bankruptcy except for $50K in student loans, which I was somehow still supposed to pay back.
I eventually recovered, but not until I lost my family and spent years trying to get myself together in and out of mental hospitals.
I said I would never own a home again.
Enter the Philippines
In 2017, I’d been in the Philippines for six years, when my new family and I decided that rent was too expensive and bought a house with no money down for USD 200 per month. It was a little house in a subdivision, about 80 sqm in total.
But it was perfect for us. We had embraced minimalism, so we didn’t buy a lot of crap we didn’t need and clutter the house up. We got most of our income from my disability check, so we didn’t have much money, but the place was a good deal, so we signed the papers.
But, there was always something to fix in this house. We built an addition on the side and woke up to a house full of water one night during the rainy season. Owning a home is expensive, even in the Philippines, but it didn’t make sense to rent, so here we were.
We love our little house, and even though our future brings us back to the U.S., we will always have our tiny house to go back to should anything happen.
Housing in America
I refuse to buy a house in the U.S.
Not only are we still in a pandemic, but some experts are saying there may or may not be a housing crash in 2021:
“Some people who predicted a housing market crash in 2020 have since retracted their forecast. Others, however, have simply pushed their predictions to 2021 and are now saying that the U.S. housing market will crash next year.” — mashadvisor.com
Add to that the state of employment, and the 12 million Americans about to lose their unemployment at the end of 2020.
I’m starting to get income from my writing, so my disability money will soon go away, and I’m left without that income and a very unpredictable mental illness.
Even if allowed to stay on disability, if I made enough money on my own to survive in the future, my conscience wouldn’t allow me to accept it when others need it more than I.
For me, the future is unpredictable, so renting is the obvious choice, and honestly, most of you are not much better off.
Sure, you may not have a severe illness like me, but your employment status may be unpredictable. Maybe, you don’t have healthcare. Perhaps you are one missed check away from homelessness like many other Americans.
Now May Be the Best Time to Wait
Until the pandemic is over, and we are on a better footing in America, owning a home is not the best decision.
Don’t let anyone tell you that you are throwing away your money on rent because you are receiving something back for your money. You have shelter, and many would be grateful to have what you do.
Don’t let people bully you into a financial decision that will affect you for the next 20 to 30 years.
As for me, at 52 years old, I don’t see myself owning another home again. I will keep the one in the Philippines but will rent one in America. Besides, my life needs to stay more mobile now as I want to travel, and my age is convincing me that life is too short to be stuck in one place.
Before you buy a house in this volatile climate, think about the implications if the economy got even worse.
- What if you lost your job or your business?
- What if you got sick and didn’t have healthcare?
- What if COVID-19 has changed the world so much that home-ownership is a thing of the past?
It may be time to start daydreaming about another American dream.