Death of the American Dream

 

My American dream does not involve a wrap-around porch, a giant yard, or 5,000 sq. feet. – AndreAnna from Life as a Plate

Some days I still wonder if we made the right choice keeping our home in Vancouver.

We kept our place because we thought there was  a reasonable chance we might be back in Vancouver quickly. My husband’s job was very new to him. He’d worked for himself for almost 20 years and this would be his first corporate job since he was 18. We weren’t sure if the entrepreneur in him, the one that liked working on his own schedule, would adapt to office life.

Our concerns were for naught. My husband really enjoys his job. In fact, our one year anniversary of the move, our Manxiversary as they call it over here, is this week. We really like it here and can see ourselves living in the Isle of Man for quite a while.

So the fear that kept us from selling was really a fear that we would sell and then be back in Vancouver a month later with no home and having lost a huge chunk of money in realtor fees and taxes.

When our mortgage comes up in November of 2016 we’ll look at our options.

The dream of home ownership has lost its luster. As we’ve simplified I’ve realized home ownership is not a requirement. Property taxes, maintenance, dealing with renters – all of it is work, money and potential stress.

Reading this account of the Worth of the American Dream was another revelation for me. This family lost hundreds of thousands of dollars in home ownership. Not to mention all those hours spent on upkeep and the stress of selling their home at a big loss. The American dream became a nightmare for them.

The old American dream is dead.

AndreAnna wrote that giving up the dream of owning a large home meant they could embrace dreams of travel and adventure. Do you think my kids will miss a playroom more than they’ll enjoy a Scottish castle tour when they’re old enough? Do you think they’ll wish they had a finished basement with a pool table when I take them to Hawaii to climb through the lava tubes their father and I walked on our honeymoon? – Life as a Plate

The new American dream is flourishing.

Rent instead of own.

Switch career streams multiple times instead of staying at the same job for 40 years.

Travel, experiences, health and education instead of keeping up with the Joneses and living above your means.

Shrink your lifestyle and possessions so you can work less instead of working more so you can buy more.

Of course, I’m in the minority here. Robi Ludwig just wrote that even post-recession people have a strong desire to own a home.

Owning a home is more than a financial investment, it’s an investment of one’s heart and one’s dreams. – Robi Ludwig via HuffPost

Living the ex-pat life sure doesn’t make me chime in with a hearty agreement on that one.

Our home in Vancouver is, sorry, just a condo. I’ll always treasure my memories of it, our son was born there (yes, right there on our king size bed that we sold for a pittance when we moved) and he took his first steps there. It’s the first home I have ever owned. Well, really owned half of the portion that the bank doesn’t own.

But I don’t invest in my heart and dreams by owning that place. I invest in my heart and dreams by living. Doing. Being. Playing. Connecting. Loving.

I find this precious discourse on home ownership and the value placed on it, disheartening. Yes, it burns my heart a little. You can build memories, invest in your children and invest in yourself, even if you move every year and always rent.

If we become permanent renters we are still a family with hopes, dreams and memories. Even if they’re not attached to a home we currently own.

Have your views on the need to own a home changed? Have you been affected by the economic crisis or have you switched from owning to renting to simplify your life?

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  • If I didn’t have an retired father close by who was able and willing to help me out around the house, there’s no way I’d own a home. When I bought it, I did so because that’s just what you did. I love that I can decorate it the way I want…paint and such…but still, it’s a lot to worry about. There are definitely advantages of not owning and I could totally see selling at some point and going back to renting.

  • It depends on your dream. My dream is a small homestead, which we have: 5+ acres, small woods, fruit orchard, vegetable garden, chickens, pasture for raising a steer and a hog. And there is still space to grow. I hope someday to leave the homestead to one or some of our children, but that is their choice.

    • Yes! Owning a home is important to me because I want to homestead. Part of simplifying for us is living a simpler lifestyle where we are mostly self-sufficient. I, personally, think that part of what drives people to need Stuff is the lack of meaningful work in their lives. Jobs give us a paycheck, which indirectly leads to providing our necessities, but there’s something innately satisfying in seeing direct yield from your hard work, like growing a garden or keeping chickens or goats.

      So we bought a small old house (1000sf) with a big yard (1/4 acre; big for being in the city), and we have a small flock of chickens and a garden, hopefully in the next couple years we’ll have a nanny goat. Then buying half a cow from a farmer locally will drastically reduce, and nearly eliminate, our need to go to the store.

      (BTW I had our 17mo on the floor of our teeny tiny apartment, I’m nursing him right now, and we’re a minimalist paleo/WAPF family. Are we sisters?)

      • I also wanted to add, though, that I completely agree that home ownership is not (or shouldn’t be) essential to the American Dream. I cringe when I hear of friends putting their entire savings towards a down payment to get a mortgage they can barely afford, just because they think they *should* own a home, because they somehow think that it’s the mark of success and without it, they have failed.

      • Haha… My youngest daughter was born on the bathroom floor, with me crouched over the side of the tub and the hub making the catch! We could definitely be sisters!

    • On our property, we have an old tractor barn that is converted to a guest house, which we rent out. This covers our mortgate/tax/insurance payment. We will have our mortgage paid off in 3 more years. So, yes we own our property, but we also have it set up so we’re not tied down to it. Even with the livestock, when we’re ready to travel, we’ll just sell it off and lock up the house. The tenant would oversee the property while we’re away.

  • I think it’s all just circumstances and experiences. We are on our 3rd home and will have this one paid off in 6 years. We made money (however small) on each of our home sales. If our situation were different from a financial perspective, I can certainly see feeling differently. My sis-in-law has had the opposite experience buying and then refinancing their home in FL and now being upside down financially. I’m certain she’d wished they’d done things differently.

    I think the most important thing in home ownership is to NOT buy too much house vs. your needs and not overspending. You don’t need huge spaces for today’s smaller families and the financial burden of being slave to your mortgage (at the expense of everything else) is just never ending stress.

    Our mortgage is not more than a rental for our family size, and certainly less if we tried to rent the same size. Then again, not once did I ever dream of a 5000 sq foot home.

    • Yes, exactly. I think the trick is to buy small– under your means and with minimal space so that you have the financial room to make improvements, repairs, and upkeep as needed, and the space suits your needs without the care taking up all of your free time (unless of course you are someone who loves doing around the house projects). The comments illustrate that location matters a lot– some areas it makes more financial sense to buy v. rent or vice versa. One friend of mine owned her home outright by 35 due to her thrifty nature. There is something to be said, too, for building equity v. paying a landlord. This is an interesting discussion, though, and shows that it is important to think critically about what is best for your family rather than assuming ownership is best in all cases. Thanks! (we currently ‘own’ a 2 bedroom as a family of four)

  • I enjoy owning because I like doing projects around the house, I’d consider it my hobby. But, after being burned I definitely don’t consider my home an investment and my “American dream” is a modest home, paid off. I certainly don’t think owning is right for everyone!

  • When I first bought my house – the house I grew up in – I thought it was a nice size in a nice nieghborhood with good schools. At about 2200 sq ft it was large, but not too large so I thought. After a divorce and just my son and I living here for awhile it was much too large – we didn’t use even half the space. I rented out a room and my brother lived with me in another room for two summers while he was in school – no problem still plenty of space for everyone. I got re-married and our goals changed. I wanted to work less – we wanted to have another child and be able to go on adventures with the kiddos and give them memories. We are in the process of dividing our house in two so the two bedroom rental will cover most of the cost of the mortgage – a 15 year mortgage that has 13 years left and has left us with a living space of about 1100 sq ft – plenty of space for our growing family. We have decided that the rental will help with our dreams by allowing us to spend less on our living space and focus on living life instead. Yes there are some headaches that come with home ownership – but in our situation I think it is worth it. If we didn’t have a house we could have seperated easily I am not sure we would have made the same decision.

  • You make a strong case for renting. We sold our big home two years ago and paid cash for our current 1960’s cottage. In two years we have spent an additional $40k on a fence, central air, conversion from oil heat to natural gas, a shed, new shingles, two new doors and NOW the toilet has started leaking! Renting at this point is looking like a much better deal. Never thought you would hear me say that. I do love my home but its like owning a car. We buy because that’s what everyone does. I’m starting to question all of my choices. Very thought provoking post Rachel.

  • I think it is a bad idea to consider a home an “investment”. With all the expenses, taxes, maintenance, mortgage interest, etc. it has been shown to not be a very good investment over time. However, it is also not everyone’s dream to own a large home with a giant yard. Smaller houses and smaller yards are far less stressful. I think it is a good idea to own, however, for children to have some stability in their life.

  • Love this blog post! My husband and I own a 2 bedroom/2.5 bath condo. We have an 19-month old son and I work from home. So, I have to have a dedicated work space. We live in less than 1,400 sq feet. There are times where I feel that our space needed to be bigger. Then I think about the maintenance, the cost for more stuff, more utilities, higher taxes. We truly believe it was God’s intervention that we purchased a small space for our first home. We have paid off a good chunk of our mortgage. For living in the Northeast of the US, we have a VERY low mortgage payment, which includes our taxes. We could not rent a 2-bedroom apartment for as cheap as we pay for our mortgage payment and association fee (which covers outside maintenance). We purposely purchased something smaller because we love to travel and enjoy really nice meals. With the addition of our son, finances are tighter and there are no quick trips to Florida for a 3-day weekend. The American Dream? Nope, I don’t buy into that notion. If you cannot afford it, it is not living the dream. It is living in debt. Renting may be the better option for a lot of people and I would certainly consider it IF or situation was not as it is now.

  • I am 25 and married with no children. Although my husband and I are planning on waiting a few years to have children, people are constantly asking us when we are going to buy a house and “settle down”. My husband and I have a really large 3 bedroom apartment in one of the nicest areas in Central Florida, we both work full time, and can afford nice things…I am not sure how much more “settled” I can be. We almost bought a house a year and a half ago but something told me it was not a good idea and we backed out. I love the freedom of renting. It is nice to know that we can move anywhere in the world if we really want to. I also think it can be cost effective. People try to advertising home owning as cheaper but those are normally base mortgage payments compared to rental payments. They tend to leave out taxes and HOA fees.

  • If it weren’t so expensive to rent in our area, we’d do that. But our $800 mortgage (with taxes and insurance) is tiny in comparison to the $1500 rent a comparable house would command. We are in a high demand area for affordable housing, so at least we could easily unload this house if necessary–the house down the street just sold for listing price within 5 days. I researched for months to find an area where people were dying for affordable houses (we’re across state lines from a freshly un-accredited school district, so folks want to live here instead) after being burned by my husband’s bachelor-days purchase of a “great deal” in an undesirable part of town. It took us a long time to unload that! Anyway, it worried me to put down such permanent roots by purchasing this house, but I’m glad we did because we would’ve been really strapped to pay for a rental. We’ve been landlords before, so we could always do that if we need to move or feel the need to live abroad for a year.

    • This is interesting to hear that owning is considerably less than renting in your area.
      I’m from Vancouver, Canada. A 2 bedroom condo in the area we live in costs a minimum of $500,000. I know, crazy.
      Those 2 bed condos rent for $2100-$2500/month. To own that condo with 25% down ($125,000) would still leave you with at $2800/month mortgage over 20 years @ 4% interest. Plus you’re paying another $350-$500/ month in strata fees.
      $2100-$2500 in rent a month vs. $3150-$3400 a month for mortgage and strata fees. Oh and add another $100 on for property tax a month.
      If I didn’t have family in the area, if I didn’t enjoy the city so much, I would move elsewhere.

  • This blog post really resonates with me this morning. My husband and I have been working towards downsizing and minimizing for several months now and the next step is going to be selling this larger home for a smaller one. We want to reduce our stuff but also our house payment so that we will have more money to do the things you mentioned: travel being most important. I don’t know that we’ll go the way of renting though, my financial background just wins out over my heart sometimes haha. The goal for us is to OWN but own less, less of a liability. Owning, like I mentioned it’s in my blood, feels so much more secure as long as you don’t overbuy and you are in a economic market that is still thriving or coming back. If we rented, yes there’s less of a commitment, but our rent would far exceed a house payment on a smaller home. So to me the death of the american dream isn’t necessarily NOT to own it’s just to stop trying to accumulate and OWN more than you need, because that’s when your life begins to suffer and you can’t afford the life experiences you REALLY need more than anything.

  • I do think too much emphasis has been placed on home ownership. When I was in my 20s and knew my husband and I were only staying for 3 years in an area, everyone kept pushing us to buy a house vs. rent (and this was at the top of the housing bubble). Luckily, we didn’t lose too much in it and now do own a home we plan on being in for the long haul. I definitely see the benefits in renting and I see all the bills add up for a house (new air conditioner, roof, taxes, etc). But part of my “dream” is to have a house in a neighborhood with kids that will grow up with ours, have a house with enough space to comfortably entertain for both locals and overnight guests, and since winters can be rough around here…we love that we have a basement for extra living/playing space. Our lot is fairly small and I appreciate that husband doesn’t have to spend tons of time landscaping etc. But we can plant flowers w/ the kids and have room for them to run around. I don’t have much of a travel bug and anyway I have limited work vacation time so I doubt I’d even vacation more if we had the time and money. But I enjoy that everyday I am happy in my home (although yes it’s a pain to keep clean, especially when I remember cleaning a 1 bdrm apt in 45 minutes). Like another poster said, there are pros and cons to either renting or owning. I would definitely like to downsize once the kids are grown and living on their own.

  • We are living the “New American Dream.” We sold our 4 bedroom house in a down economy and moved into a 2 bedroom apartment. We moved closer to work to shorten the commute and free up time. Now without the chore of taking care of a house and all that go into it, we have our entire weekends to do whatever we wish. We downsized our posessions in order to better take advantage of life experiences. Our move freed up over $1200 per month that were tied up in house related expenses. We now have money to save, and money to spend on experiences. Even if our rent were much more, we’d still be in a better place financially. The biggest benefit for me has been the increased time to spend with my wife and daughter. Evenings and weekends are now spent together as a family, instead of in commutes and home maintenance. I could go on and on, but I cover all this and more at my blog.

    One question: What do you mean when your mortgage comes up on 2016? Is that an increase, next payment, or what… just not sure what you meant by it.

    • I’m all for people pursuing whatever their dream is, but I don’t think it’s accurate to label any one choice the “New American Dream”. I think it’s much more accurate to label it *Your* American Dream. Some people have no desire to visit amusement parks and go to expensive movies….even if they can afford it. If that’s your dream so be it.

      I’m also struggling with the “own” vs. “rent” choice as if that is the only way to cut housing costs. In our area, renting does not automatically mean reduced cost. Sure there is upkeep and it’s not always inexpensive. Then again, we’ll own our home outright in less than 10 years, so that equity is nothing to sneeze at either.

      Very individual choice.

      • Eileen,
        Sounds like you might have popped over to my blog and read my latest post, but didn’t get the full picture. The new American Dream I was referring to was the one Rachel mentioned above, and it’s much aligned with our current way of thinking. Our goal is to create more freedom to do the things we want, whatever they may be, but typically experiences rather than stuff.

        Up until our move earlier this year, the things we had limited our freedom. These limits came in the form of time and money. For us, the house took too much of both, and now that we are renting a smaller place, we have more of both.

        • Well said.
          I know this new dream, less stuff and more time, is not everyone’s dream. There are lots of people that enjoy owning a large home, maintaining it, entertaining in it and decorating it. At least there must be from the proliferation of home decor magazines, websites and television shows and the US mortgage debacle.
          But, like you, I’ve been rethinking my dream the last few years. I’ve realized home ownership isn’t part of my dream. We’ll continue to own for now but I am not emotionally tied to being a home owner.

        • Thanks for the response. As I mentioned in my posts, one’s lifestyle and one’s financial plan is very personal and individual choice. Having a mortgage doesn’t necessarily mean you can’t have freedom that you seek. It doesn’t mean you can’t give your children experiences as well. One can own a home and not fall victim to consumerism. The two are not mutually exclusive.

    • We do things a bit different in Canada. Our mortgage interest rate is set for five years and then it comes up for renewal at the end of that term.

      You’re story is so inspiring. Hope some people pop over for a read. You have detailed all the steps to downsizing so well. Great resource. :)

      • You can get out of your term early – you just need to look at what the cost will be. In my case, I would only have to pay $3000 (I’m in Canada) as interest rates have dropped since negotiated the five-year term in 2010. It might not cost you as much as you think.

        As far as renting/owning – a very personal decision. If it is financially drive; however, then you really have to do the calculations carefully and account for average appreciation rates and equity contributions to a mortgage each month. I am in Victoria BC and I have calculated that buying a home with a suite for $600 000 is more affordable than renting – even though prices are really high right now – and worth it for personal value reasons as well. We are able to get a 10 year mortgage at 3.84 and this makes all the difference.

        • Yes, we looked at getting out of our term early before moving overseas. We had 3.5 years left on the term and a large mortgage that wasn’t at a great rate. The cost to us would have been roughly $20,000. Yikes.
          We actually renegotiated our mortgage in November for another five years at a better rate. Not a great rate but better. It means an extra $100/month of our mortgage payment goes towards principal.

  • I think the dream is personalized. We own our home, but will have the 30 year mortgage paid off in 5, so we really will OWN it. So for us dream = freedom from rent / mortgage, in a town we both love and our careers flourish. We’ve edible landscaped it (or, are…) to be low maintenance / high yield. We value travel and experience over toys and keeping up with neighbors. So, yes. We dream. It’s just a little different than some.

  • Although I am working toward a simpler, greener life, I would not trade home ownership for anything, especially an expensive rent in southern california! We bought our home 17 years ago and it is almost paid off. We did not stretch ourselves with the purchase financially (I thought we would live in the house for 4 years tops because we had moved so much) so it was far from my dream home. However, over time and with some design skill on my part, we have slowly transformed the home into *more* of my ideal home by adding wood floors and mouldings, etc. It’s still not a dream home, but we chose to live below our means-now with two teenagers that are college/art school bound, I am glad we made the purchase we did! It has worked out well for us, but my husband and I have had very stable jobs that we have not felt the need to leave.

  • We’re currently renting till we find the right home. My desire is to be able to garden, become more self-sufficient, repaint to make it more “home” to me, etc. However, your posts always make me think – maybe not being tied down to a mortgage would give us more freedom? Thanks for making me continually reevaluate my long-held ideals of the “Dream”!

  • I loved this and really could relate. We moved almost a year ago too, and have rented out our house. It seemed the best choice, but the meaning of owning a home has shifted for me since we left.

  • I suppose it depends on what your definition of “freedom” is and what you would like to do with it. Before meeting my husband, I lived for 19 years in the same modest house and have traveled to Hawaii, Austria, and Italy among other places. My sister’s first full sentence as an infant returning from a trip to Austria was a happy, “We are home!” My husband had moved 13+ times before he met me at age 21 and had only traveled to Texas – for boot camp. He has said he will do whatever it takes not to put our children through that. Since then we have both rented and owned, have had our equity go up and down, and are currently landlords and owners with 2 houses. We live in a raised ranch and also rent out an apartment in the basement, which means that our bottom line costs are much less than if we were renting a similar-sized property in the same location. Of course, not everybody could embrace a “new dream” of only renting – SOMEBODY has to own the properties, right? :)

    In our case, I like the freedom of being able to have my dogs and cats without first seeking permission or worrying about what damage they might cause. I like not getting messages on my answering machine from the landlord asking me to lower the blade on my lawnmower a notch the next time I mow the lawn. I like being able to paint the walls whatever crazy colors I choose, and the deep satisfaction I derive from remodeling a bathroom myself from the studs out. I like the security of knowing that I won’t get a call saying I have 30 days to find a new place to live because my landlord is “selling” the house to his daughter. Most of all, I like the rich history of the summer cottage my great-grandfather bought in 1944 that has now seen 5 generations of my family. Venice was indeed beautiful, but for me not nearly as beautiful as sailing home and seeing my mother waiting for us on the hill in the same old lawn chair I can still picture my great-grandfather in, waiting for us to bring him the little fish we caught so he could fry them up for lunch.

    I think it’s extremely unfair to tout the “Death of the American Dream” – first of all, how morbid. Perhaps it would be a bit more fair to call it (more positively) the Birth of New American Dreams. You should be able to celebrate the increasingly broad embrace of your own values without being down on those of us still “old fashioned” enough to desire home ownership. That old dream may have been tarnished of late by people who were more focused on a competitive “bigger is better” mentality, but there are still plenty of simple people out there like us who just want a little piece of this planet where we can say, “I am home.”

    • As a renter, I agree with a lot of what you’re saying! There are definitely tradeoffs, but I find myself craving the control and freedom that you get by owning the building you live in. It’s like moving out from your parents’ house after high school, and realizing you can go out for an evening with friends without asking anyone’s permission. Being able to paint walls, hang shelves, play music after ten o’clock, and not have to worry about random people coming into your living space to do maintenance such as checking the smoke alarm batteries… ahhhh, some day!

  • Buying a home is very important to me. My current rent is twice what I would pay if I were buying the house I’m living in. Bummer. My goal in life is to live a money-lite lifestyle with my expenses being as low as possible so that I don’t have to work any more than absolutely necessary. Owning a home outright with a small cottage on my property to rent out is a large part of this plan.

  • I know it is very dependent on everyone’s circumstances that may change their view/opinion on this. Maybe where I live is the exception but in Los Angeles, owning a home is significantly less than renting at this point. We have a $1700/mo mortgage that includes taxes and insurance. Houses on our same block (same layout/sq footage) are renting for $3500/mo while 1-2 bdrm apartments in the same area are renting for $1900-$2500/mo. I would take my mortgage with the occasional repair/expense as needed, with every right to do as I please to my home and property, and not having to ask/wait on a landlord while saving $1800 a month, any day of the week. And since we’re not upside down in our mortgage, we have equity as well. And that’s not something we’d have if I were renting. It’s nice to know if worse came to worst, we could sell our home and walk away with a profit. Renting only gives your landlord that option. The one thing we always kept in mind was to buy a home we could grow in but to not buy a house we could’t afford.

    I grew up in a family that rented and moved a lot. Sometimes by choice, sometimes not. I hated it. Changing schools, never having friends for long, or a bedroom that I could make mine, because who knew when we’d have to move again, was something I never got used to. I was never able to establish roots. Maybe I see it differently because of that, but for me a house is more than just a possession. It means more than that to me. It’s much more significant than some old clothes that I’d donate or throw away. I know we can make a “home” no matter where we live, but as a renter, you can only do so much to make it so. Even then, you’d likely have to get approval to do so. When we were house hunting and choosing where we’d live and grow as a family we fell in love with the house we live in now. We envisioned our life and future together in it and that’s why we bought it. And now, it’s the hard work and sweat that we put into it that makes it OUR home and there’s definitely a certain pride we take in that. I know that’s not something that would be possible if we were renting. It’s security and stability and not always having the constant worry in the back of my mind if the landlord is going to pull the rug out from under us by selling the house we’re living in or raising our rent out of nowhere. And, for me, owning a home doesn’t tie me down for the rest of my life. I can, and do, still travel and have fun. And if we decide to make a big life change and move, we can always sell it. And the beautiful thing about that is we are the ones in control of that decision. The old American dream is definitely not dead for me.

  • We too are in the mortgage payments are less than rent category. However your point about hidden costs is very valid. Property taxes, sewage, water, and garbage payments to the city add a fixed monthly cost. Our house is basically about to be forty like myself and is starting to show its age as well. In the next five years we will need a new roof, for energy efficiency we probably need to re do the windows and the furnace. Also we are thinking about a fairly expensive remodel. Even amortized over their the full length of their usefulness, those are not insignificant costs. But on the flip side we are happy here. I enjoy doing projects around the house. We like having a garden where are kids can experience growing their own food. We were also fortunate enough to buy a house with a pool. Our home is now our vacation destination. So we really lucked into a home that greatly adds to the quality of our life. But your post still resonates. Don’t live someone else’s dreams. Find your own “American Dream.”

  • I agree with many posters. You can’t generalise. It’s an individual thing and what is good for some is not good for others and vice versa. Also, the situation varies depending on your phase in life, as well as your location in the world.
    We rented while our children were growing up – we started a family young and never had the opportunity to save for a deposit. Our travelling was limited to visiting family abroad or my parents’ holiday home. It would have been nice to have bought a home in the country village where we lived and have the kids live in our “own” space and one location, but it wasn’t an option at the time. We felt we lost a lot of money through renting, paying the standard rental price month after month, year after year.
    As it happens, mortgage rates dropped extremely low in this country during this period, while house prices remained stable, so with two teens still at home and a more healthy bank balance (= husband’s career took off), we were later able to buy a property in a more urban location and plan to keep it long-term, whether we live in it till we retire/die or whether we decide to travel or move and rent it out as an investment. We pay a lot less in mortgage payments than if we were renting. And in this country, the aim isn’t to pay your mortgage off, as you would then be taxed on the value of the property you own, (you are already taxed on a possible rental income, even if you live in the property yourself) so a fine balance is kept by the majority of home-owners; different countries, different systems. Our latest mortgage deal is even better than the one we had 5 years ago!
    Although I would have liked to own a home at an earlier date, I have to admit that I would not have known then what I know now and could well have been tempted into “bigger/better”, rather than the modest house we have and which we will always be able to afford. As it is, as our kids move out, we are able to redistribute the space to suit our changing situation without the house being so big we rattle around in it. If we did decide to travel or move, I would certainly aim for smaller rather than larger – I have better things to do than clean house all day, especially as I get older. Yay for simplicity and minimalism!

  • We sold our last home two years ago and moved out of state. We are now renting a nice big apartment in a beautiful complex with no maintance. After owning three homes, thousands and thousands in interest payments, property taxes, home insurance and the never ending cost of maintence and home improvement we are as happy as clams and enjoying every minute of it. Yes we could probably buy another house for what we are paying in rent, but we are saving a lot each month by not having to pay all of the additional cost of home ownership. Another big plus for us is being able to put a lot more away in our retirement fund each month. We now understand that our family memories are what we do and experience together, and not ruled by the four walls that surround us, which by the way were really owned mostly by the bank.

  • Interesting article, especially the one you linked to. Good perspective. We currently rent and have no issues with that right now. The idea of having a mortgage makes my head hurt. Also, we don’t know how long we’d like to stay in this town and owning a house in this market would really tie us down.

    However, like some others have said, we REALLY want to homestead and having a permanent piece of sustainable property just makes more sense to us.

    By down-scaling (or really, never up-scaling when our income increased) we were able to pay off $90,000 of debt (school loans, car payments and credit card debt) in three years. Now, being debt free, our goal is to PUT AWAY the money we used to be putting toward debt. In 5 years, we would love to have $150,000 stashed away and just outright buy a piece of land and build ourselves a little home.

    • We are doing a similar thing. We have a much higher student loan balance. For us we will rent until 3 things happen for us 1. We find the area we wish to make our forever home 2. Pay off our combined student loan debt and 3. Have the cash saved to pay outright.

      We really have lucked out with our current landlord. We can paint and have pets as we desire, but we don’t want pets with 3 kids. With the younger ones being 3 & 1 we don’t want one yet. We had an initial 1 year lease and now are month to month until we decide to move. For us with my husband finishing his dissertation it gives us more freedom to move when ever we want. I dislike driving down the road we live on because of the accident the children and I were involved in almost 6 months ago but there are other routes I can take to go places. Plus our next door neighbor (duplex) is the best neighbor I have had living in a rental as an adult.

    • Amazing! How inspiring! Maybe we have too many bills or maybe my constant budget cuts will never be enough. I think we are low enough on the totem pole that paying-off debt and saving for the costs to sell our house will take us a while. How did you stay motivated those three years? I’m pretty much Dave Ramseyed out. I have read his stuff until I’m blue in the face. My husband and I need more will power I think!

      • It was definitely hard! We basically lived a very low-income lifestyle. We never really saw our paychecks. We’d put just more than we thought we could afford toward our debts each month. If one of us got a bonus or extra money (my husband was working a commission-based job at the time) we put all of it toward debt. My husband was kind of obsessed!

  • Well, for me personally, buying my home was the best financial decision I ever made. My house is 900 square feet with a full basement, 2.5 car detached garage, and a huge yard that allows me to garden to my heart’s content. My mortgage payments (taxes, insurance and all) are $450/month – that’s less than the cost of renting a studio apartment. There are, of course, upkeep costs and some work – but it’s generally stuff I really enjoy doing. Plus I LOVE the freedom of being able to do whatever I want to it without getting permission from a landlord or HOA.

    I’ve been making extra mortgage payments for a while, and every year at Christmas my parents give me some money to put towards paying it off, so the mortgage will be completely paid off next year. Being able to keep my costs so low, and being able to produce a good amount of my own food has allowed me not to have to work for a living, and it’s hard to imagine being able to take that plunge when you don’t have control over what your living expenses will be.

    But, as other folks have said, I don’t think this is a one size fits all equation. When I was younger I loved to travel, but I sort of outgrew it – and these days the whole idea of having to deal with airplanes and hotels and restaurants and taxis is REALLY unappealing. I just feel rooted and connected here in a wonderful way, and have no desire to go anywhere else. So, I guess not all dreams are one size fits all either.

    I also have to say that I bought my home before the big housing bubble – and shopped around for 6 months to get a great deal, so even after the big crash, my house is still worth more than twice what I paid for it. I figure in terms of net worth, I’ve come out WAY ahead even considering what I’ve put into maintenance and improvements.

    • Congrats to you! Definitely not our case with our home. We are owning for less than renting…but maintenance and our having two vehicles (both used – one seven years old and the other 10!) makes life expensive.

  • I know I’m supposed to *want* to own my own home, but truthfully? The thought of it scares me to death. The expense, the work, the possibility of needing to move for some reason and not being able to sell it…YIKES. My husband and I rent a small house for about $400 less per month than we’d pay for a mortgage on a similar place. The landlord lets us paint, plant flowers, whatever. Any repairs we make to the house, he allows us to subtract the cost from our rent that month. Someday we probably will own our own place, but it’s not a priority for us at all.

  • Our house is underwater. I now advise people to consider other options when wanting to buy a home or to be very sure they are near a school they want their kids to go to, etc. My American dream is very different, in reality.

  • My attitude toward owning has changed–I think that it’s a better idea than ever, if you can afford it. We’ve owned a home together for over six years now & my husband had a place for a few years before that. We’ve dealt with our fair share of maintenance & renovation concerns with all the stress that brings. However, because we’ve been in the market so long, we actually benefited from the boom here in Vancouver. We own a house in the neighbourhood we want to live in with two basement suites that we rent out. If we hadn’t bought & instead rented a similar house in this area, we’d be paying a lot more for housing than we do now.

    What I like best about owning my house is that I am the boss. There’s no landlord raising my rent every year. If something breaks, we fix it–we don’t have to call the landlord & hope he’ll get around to it eventually. We can do it properly instead of the cheapest way possible. I can paint & decorate however I want. If I put money into renovations, I may profit from that when I sell the place. Most importantly, I won’t be kicked out for ‘renovictions’, to sell the property or because the landlord says he wants to use the place for relatives. All of these things seem common here in Vancouver–I see renting as a much less secure option than owning.

    Oh & how could I forget? Someday my mortgage will be paid off & my housing costs will be virtually zero. That will never happen renting.

    • Lisa – that’s great that you invested well and early in Vancouver. Kudos to you.
      However, it’s now very challenging for ‘regular’ people to get into the market there. There is so much pressure from media, advertisers and family that owning is a must for everyone.
      It’s not a must.
      Particularly in Vancouver.
      Average income earners cannot afford to buy in Vancouver right now. I’ve seen a lot of people overextend themselves to get into the market and a huge mortgage for a small home can be a real burden. It’s a risk. What if you lose your job? What if interest rates go up at the end of your term?
      Do you think still think home ownership is a better idea than ever at the current prices? Would you advise friends of yours that gross $100,000/year to extend themselves beyond their means to get into a $600,000 crack den on Vancouver’s east side just so they can say they are homeowners?
      You made a great choice six years ago and so did we when we got into the market. But I just can’t agree that home ownership, particularly in Vancouver, is a better idea than ever right now. It was a great idea ten years ago or even six years ago but not now.
      – Rachel

  • Wonderful post. We’ve had a mortgage for a year and I hate it! We chose to buy instead of rent b/c of bad neighbor experiences but when buying a home you are stuck with your neighbors as much’ if not more than, in an apartment/condo/townhouse. I am itching to sell it, but we don’t have enough saved to pay fees and for the loss we will probably take. Shucks. I think we should have a camper and bee-bop around the U.S. and then world. Maybe this will happen. I hope so.

  • As a homeowner and a previous renter I can say hands down owning (paying a mortgage) is better for me (at least right now). Every situation is different; we know we will live here for at least 5 years (which makes it worth the money and hastle), my husband is Mr. Fix-it, we both love to have space to move (both inside and outside- we have a 1/2 acre and a fairly large house for 2 people-soon to be 3), we bought an income property (rental basement to supplement our income) Yes, we bought a house bigger than we need, but buying a house has been the best decision. Our mortgage, utilities, taxes, insurance etc.. are less than the rent/utilities I was paying as a single person. The thing is making the best financial decision for your situation. Ie. we bought in a down market, we got more house/land for less money, had a 20% down payment, can comfortably make our monthly payments, we have a low fixed interest rate (why anyone does adjustable is beyond me). I will say that having worked for a few landscape companies I will NEVER own a home with an HOA.

  • I am thrilled to be selling our home in Deep Cove to rent a condo in Whistler. My husband and I became accidental homeowners when we bought a family business that came with a home/office as the main asset. My husband only ever wants to be skiing or mountain biking in Whistler and so far it looks like our boys are following in his footsteps. When we realized that our local public school was a really poor match for our oldest, that sealed the deal. We have been looking for a home/condo for sale in Whistler, but when a rental came up near the school and a grocery store, we jumped at it and I feel nothing but relieved!

  • I am 48 and live in the home I was raised in since the age of three. After high school I went away to college, met my husband and stayed (in a neighboring state). I never thought I would ever move back. But my grandma passed away unexpectedly so I moved home with my 2 boys, ages 6 and 2 and took care of my grandfather (they raised me). After he passed a few months later I couldn’t imagine being anywhere else. We sold our home in the next state (only took 5 years!!!!!!) and have lived home every since! I don’t have a mortgage which is a huge blessing. My children have had the chance to live and grow up in the same rooms I did. We added a daughter to the mix about a year after we were here as well. My home holds tremendous memories for me. And though we have made many, many changes to it it is still the home of my childhood. I could move tomorrow but don’t think I could sell the home yet!!!!! I garden in the same space as I did as a child, my daughter had my bedroom growing up, I am even the postmaster at the same post office my grandpa was a rural carrier in for many years. For me my house represents almost all of my life and I can’t imagine not having it!!! I know not everyone has had what I have had or may not even have wanted it but I love my home. It brought me great comfort at the times of my familys passing as well as great joy to know my children could experience some of what I did as a child.

  • One final thought. I completely understand the financial hardship that has hit some people depending on when they bought, where they bought, and how far the stretched their own budget. I completely understand that renting removes a great amount of that risk (maybe all of it). But I don’t see how that gets extrapolated to mean that buying a home = bad. No more so than buying a car that turns out to be a lemon and then deciding that buying a car = bad.

      • Then I suppose the “The American Dream is Dead” was confusing to me. My parents were born in the 1920s. They did not have televisions as children. Yet they bought a home when they married and started a family in the 40s. Media and banks had nothing to do with it.

        I wholeheartedly agree that “keepin up with the Joneses” is a terrible way to conduct your life. But people that do it have no one but themselves to blame.

  • This post got me thinking and I wanted to chime in with my opinion too. My husband and I did the owning our own home thing when we were first married, because we were in an area that owning was cheaper than renting. We had a good experience.

    However, we decided to live a more nomadic lifestyle after 3 years of owning a home. We loved that too. It was fun to not own and fly by the seat of our pants, not feel tied down to anything. In 6.5 years, we moved 13 times. Every move was a job change, and we had 3 children during this time. We often shared comments such as, wow, we are hiking today because we don’t have to mow the lawn. It was hard to imagine wanting to own a home again.

    But 6 months ago, we bought another home. There are a few reasons why we did, but the biggest reason was that we were exhausted from looking for the next thing. Everything we did seemed temporary. Not that they had to be. But without being invested and owning a place, we felt like we would eventually need to move on. We spent so much time hashing out what we should do next- fun at first, but it lost its luster and felt like a burden. It is amazing to have a break from that. Without purchasing a home, we couldn’t have the freedom to just be and enjoy where we are.

    That being said, I think we can truly live and be more now because we have tasted both. Will we go back to being nomadic? Possibly at some point, and having made that choice before, it will be easier to take the leap again. It’s not as scary. We don’t have to own a home, and it does mean giving up a bit of freedom but there are benefits and freedom of a different sort to owning too.

    I don’t disagree with you that feeling you HAVE to own a home is ridiculous, especially one you can’t afford and have to work too much to pay off, but depending on your dreams, owning a home can lift a huge burden as well. It feels good to be grounded at the moment.

  • When we bought our home almost 11 years ago we planned to stay here until we retired. Over the years our neighborhood has begun to decline. Our home has reached the age where things are starting to go wrong. Two years ago we had to put a new roof on. Last year we had to put in a new HVAC system. Three years ago I forced to retire at 53 due to multiple chronic health issues. Around that same time my husband lost his job after almost 14 years with the company due to the economy crash of 2009. He loves his new job in a new field but it pays substantially less. Between his decreased pay and mine, our income is down 61%. We’ve wanted to sell and downsize for a couple of years because of my health and our drastically reduced income. When we talked to a realtor we found out that we probably would not get enough to pay off our mortgage even though the value had increased according to the county tax assessor’s appraisal. Last year it became apparent that we couldn’t keep going with the creative finance we were having to do to pay the house payment. Someone told us about the Home Affordable Modification program and we applied for that. The end of April (14 months later), we got a call from our Home Preservation Specialist (what a joke of a name!) that our investor had decided that we weren’t a good risk and denied our request for the payment modification. That was the first we knew that the bank only managed our mortgage and it was actually owned by a investor. Since they denied our request, the difference in the trial payment and the actual payment came due immediately as well as late payment fees. We had a week to come up with almost $13,000! The icing on the cake was that because we had not been paying full payments, our escrow account was short so we could either pay that lump sum or add it to our payment, raising it $125 a month. We are now waiting hopefully that we will be approved for a Home Affordable Foreclosure Alternative Short Sale. This type of short sale completely releases us from our mortgage no matter how much the purchase price falls short of what we owe. If that doesn’t work out then we’ll do a Deed-in-Lieu of foreclosure where we’ll sign over the title transferring ownership back to them. Nothing has gone as we planned it. We are tired of fighting and are ready to get out of here. We’ve put a deposit down on a really nice 2 bedroom apartment that’s about 500 sq feet smaller than our 3 bedroom home. These apartments look more like zero lot line homes or duplexes than they do apartments. We’ll have an attached two car garage, they furnish a washer and dryer and are open to us putting up shelving in the garage and painting as long as when move out we return every thing to the way it is when we move in. We are looking forward to calling someone when repairs are needed and not having to worry about the cost. We’re looking forward to no yard work unless we choose to plant a flower bed. I’m looking forward to a smaller place to clean with less stuff which will mean more time for sewing and quilting. My husband will need to work another 10-12 years to draw the most Social Security he can and so we can build up his 401K. When he retires, we’ll move back to where I’m from and my children and grandchildren are. If we can adjust, we plan on staying in the apartment till time to move home. Even if we decide we need to be in a house, we’ll rent. For us, with my health restrictions and our income that will probably never be what it once was it just makes more sense to rent.

  • We sold our home due to an announcement that already out of hand property taxes were going to increase substantially. We began renting because we were foster parents and felt it was important to stay in the area for our children. As we sort all of this out I have found that I really like renting. No maintenance, no property tax, and we are in the process of simplifying our lives and our “stuff”. We own a couple of rental properties out of state as well, so we own property basically for investment purposes. It is working for us.

  • I think there are good reasons to rent and good reasons to buy. The real problem – in my opinion – is not home ownership; the real problem is that many people in North American society are addicted to living beyond their means. And I do REALLY mean addicted! Of course, when you don’t budget and don’t make a decision before house shopping about what it is wise to spend on a home (or you do, and refuse to stick to it, seduced by the wonderful house you saw that you absolutely *must* have because it’s your dream, etc etc), that’s where the problems start. The real problem is the lack of budgeting and saving most North American engage in.

    When my husband and I went house shopping, we had been budgeting as we rented and knew – quite clearly – that come hell or high water, we would NOT go over a certain dollar amount. We were insistent, because we wanted to be able to comfortably afford our home on just one of our incomes; we refused to buy a home where we’d need both incomes. We wanted to have more children, and I wanted to be able to go on mat leave without a care in the world. I also wanted to know that if one of us lost our jobs, there would likely still be one of us whose job was secure, so it wouldn’t rock our family finances. We intentionally went house shopping in the winter, when folks are maxed out because they didn’t budget for Christmas, etc. We signed the deal on our 3rd wedding anniversary exactly :). We moved out 20 minutes north of where we were renting because, as much as we loved the area we rented in, it was simply too expensive. When our realtor told us about the house that later became ours, we told her quite firmly to tell the other realtor that if he came back to us with a counter offer, we were out – there was a house two streets over selling for around the same price, and we refused to get into a bidding war, waste precious time, and end up with neither of the homes! It worked – we paid exactly what we were willing to pay, and never exceeded the price we initially budgeted would be best for our family.

    On renting – I have an aunt who got really burned by not buying. She asked her husband for years if they could buy a small home, and he refused, saying he didn’t want the debt. They had huge savings set aside for emergencies, and never had kids – so all would work out fine, so we thought. Well, she got sick, he lost his job, they eventually torched through all their substantial savings….and were forced to move from the place they rented. Because, at the end of the day, renting doesn’t build equity!!! The saddest part of this is that if he had listened and agreed to buy a small home, they would’ve been mortgage free -by a mile! – by the time she even got sick! They would’ve had their substantial savings, in addition to the equity in their home, to help them weather the storm of her illness and his job loss. They certainly wouldn’t have lost their home, but because they were renting, when the savings ran out, they were sheer out of luck – he simply didn’t get a replacement job in time to avoid catastrophe.

    There will always be something good to be said about owning a home within one’s means. Always.

  • Really enjoy your blog. Started by reading your entry on selling or renting while living abroad. We own a home in the Toronto Area and will be moving to Spain in a couple of months with our 4 kids. Also struggling with the decision to rent or sell. I am starting to see my assets and possessions a little differently after reading this entry and the comments from others. I think that it’s good to not get too attached to your “stuff.” Thanks for writing this.

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