Buying a Home: Is It Right for Everyone?

Buying a home is one of the biggest purchases you will ever make. It’s part of the American dream and a ritual of becoming a “real” adult. With so many expectations, it’s easy to see that the act of purchasing a home is not just a financial decision. The emotions of buying a home can obscure whether it’s the right thing to do for yourself. You should consider these three factors before making your decision.

Should I Buy a Home

#1 Effect on Your Savings Rate

For most of us, a home purchase will be the largest purchase we’ll ever make. It will affect a significant portion of our income, and a mortgage along with maintenance will be one of our most significant monthly expenses. Buying a home means that the money spent on your home will be unavailable for building your savings.

#2 Will Owning a Home Make You Happy?

Other people’s demands should not determine your decision to purchase a home. Some people might be happier enjoying the flexibility of renting and having a larger savings account. Home should be what makes you comfortable. Buying a home can offer more privacy and customization of your living space. It also means maintenance repairs and possibly dealing with a Home Owners’ Association (HOA). That is why if you decided to buy a home, make sure you do it for yourself.

#3 Your Home Is Not Always an Investment and Can Be a Liability

Despite the common belief, buying a home is not always an investment. It is difficult to make money on the home you live in. Investment properties that you rent out and provide cash flow is a different story.

Appreciation is dependent on the housing market of the location of your home. You must sell your home to realize any financial gain. You will also need to move to a cheaper area to benefit from financial gain. Plus, selling your home is not as easy as selling a stock. It will take some time and realtor commissions in a lot of cases.

When you own a home, you also must factor in homeownership costs to carry your “investment.” These go beyond the mortgage and considers property taxes and repairs.  Your home value may appreciate, but the other costs add up too.


Whether you purchase a home or make alternative arrangements, you should do so with full understanding and a clear head. Calculate the real cost of home ownership to ensure you know how it will affect your current and future finances. Then you can answer the question, “Should I buy a home?”.