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Should We Buy a House?

August 22nd, 2010
money, house, giving  [html]
Julia and I currently rent a small apartment in a relatively urban area. We're trying to figure out if it makes sense to stop renting and buy a house. You have a lot more control over a house, it might be cheaper in the long run, and we could have things like a garden.
Control over the space, type of space
Right now we can change very little about our space. We got permission to paint, but the walls, appliances, heating, electricity, plumbing etc are all out of our control. Pets are restricted, there's no area for gardening, the property manager had the clothesline removed for most of the summer. We're somewhat isolated in that it's just the two of us.

We could buy house with a gardenable area, but then again we could also rent one. Gardens are tricky in that you have to start over when you move, so living somewhere we knew we wouldn't be kicked out of by changing rents would be good.
Money
Depending on how long we stay, how expensive the house is, and whether there are other people living with us sharing the rent, a house might be cheaper. Because we give away a lot of our money we would like this to reduce our spending on housing, which is currently based on a rent of $1075/month. One thing it would definitely mean, though, is that we would be postponing giving (as much / any) money away until the house was paid off. This is because we want to minimize interest paid, so we should pay it off as quickly as possible. We would have to increase our giving after, but I can calculate a giving "obligation" for each year as a kind of debt and pay it off after the house. As long as owning is cheaper in the long term then this should mean we can give more money away not less.
Is this a good time to buy a house?
Prices are down from their peak in 2005, and there's a lot of talk about house prices being "low" right now. The oldest baby boomers reach 65 about now, and the retirement rate should start to go up. Baby boomers haven't saved much and many of them have their houses as their primary savings, so will need to sell to keep having money after retirement. Massachusetts is also cold, so many will want to leave the state for the south. The areas we're interested in, though, are the more walkable ones, and retirees like such areas too. So while I expect MA house prices to fall over the next 20 years I don't know if the areas we're interested in are likely to fall as much.

Overall, Julia is pretty house positive while I am more conflicted.

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