Should I Buy A House?

[Bb_cpa]

My wife and I live in a very high cost of living area, $1.2M median house price. We are mid-30s and have been renting for many years and really would like to buy a house. Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many and we would like to garden and "make the home ours" via ability to remodel/landscape/etc. We have been looking and anything suitable will run approximately $7-$8k/month mortgage. There are a few cheaper options but they need six figure renovations that will just get us back to the $1.1M+ total cost range. We currently rent at a below market average of $2,300/month. The difference in our mortgage and current rent would be significant and would push us to the maximum 42% debt-to-equity the banks will allow. We have never come close to this debt-to-income ratio which makes me nervous but in this market I don't know there is any way around it. We really want to live here given we grew up here and most of our family is in the area. We could move but we would miss our family. We could buy a rental in a lower cost of living area as an investment property so we at least participate in some equity appreciation but then we don't accomplish the "make our house ours" objective. Just curious what your thoughts are. Thanks!

[stoptothink]

That cost differential is astonishing. You don't mention much about your financial situation, but the fact that it would push you to the brink of even qualifying suggests this is a no-brainer "no" at this point.

[KlangFool]

Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many and we would like to garden and "make the home ours" via ability to
remodel/landscape/etc.

Bb_cpa,

This is FOMO speaking. Just say no and you will enjoy seeing how this is a big down driver for many in terms of personal wealth in the coming recession.

KlangFool

[Bb_cpa]

combined annual income of $240k. no other debt. we have enough saved for the 20% down but that's it so we would finance 80%. any future reduction to interest rates would obvious help as we could refinance but I don't want to rely on that.

[toddthebod]

It's probably a poor financial decision, but if a mortgage at today's rates puts you at 42% debt-to-income, that means you have a lot of income. What's your monthly budget look like right now?

[stoptothink]

combined annual income of $240k. no other debt. we have enough saved for the 20% down but that's it so we would finance 80%. any future reduction to interest rates would obvious help as we could refinance but I don't want to rely on that.

Have you tried getting pre-qualified? My guess is that it wouldn't be a shoe-in. Sucks that you are financially successful, at least from an income standpoint, and can't afford to buy a home, but you are choosing to live in a VHCOL area. This would be a really bad financially decision, right now.

[KlangFool]

combined annual income of $240k. no other debt. we have enough saved for the 20% down but that's it so we would finance 80%. any future reduction to interest rates would obvious help as we could refinance but I don't want to rely on that.

Why would you want to sacrifice so much of your life for a house just to lose it in the coming recession?

KlangFool

[MrJones]

Mortgage rates are 7%. Even the most expensive areas in the country (eg Bay area, CA) have house appreciation rates of 5.5% in the long run. Meaning you're losing a lot if you leverage right now.

Have you run the numbers on nytimes calculator? In a VHCOL at current interest rates for me, renting wins by humongous margins. Don't believe FOMO based reasons to buy. You might be surprised if you ran the numbers, which most folks don't.

The driver of personal wealth is discipline to save. If you'll only save if you had a mortgage, sure, it's something to consider. But I'd argue you have deeper problems then to work on rather than buy.

[ScubaHogg]

Is this an equivalent house that you are renting?

Your yearly total for renting is like $27.6k. The annual interest on your mortgage will be around $70k, plus maintenance, taxes and insurance. How exactly will shelling out tens of thousands to the bank build your wealth?

You’ve got a crazy good deal right now. You can sock away $50k/year+ just on the savings by renting. No way I’d buy in your situation

There are those who owed in 2008 and those who didn’t. You can always tell

[MrBobcat]

Is this an equivalent house that you are renting?

Your yearly total for renting is like $27.6k. The annual interest on your mortgage will be around $70k, plus maintenance, taxes and insurance. How exactly will shelling out tens of thousands to the bank build your wealth?

You’ve got a crazy good deal right now. You can sock away $50k/year+ just on the savings by renting. No way I’d buy in your situation

There are those who owed in 2008 and those who didn’t. You can always tell

^What ScubaHogg said. No way I'd buy in your situation.

[Bb_cpa]

Bb_cpa,

This is FOMO speaking. Just say no and you will enjoy seeing how this is a big down driver for many in terms of personal wealth in the coming recession.

KlangFool

I know its FOMO. I can feel it. BUT, the "recession" I (and I am sure many other young buyers with no/little rollover equity) have been waiting for doesn't seem to want to happen. Even if it does will housing be affected? Seems against the logic of most users of this site to hope for a different future outcome than what has been the historical norm, which is why I feel waiting for cheaper prices is foolish. I do appreciate your thoughts however.

[Quote fixed by moderator Kendall.]

[Bb_cpa]

really appreciate all the replies so far. there definitely seems to be a consensus forming.

[bloom2708]

Keep renting. $5k per month less spent should be a "huge driver of wealth" if you save most of it.

The property taxes, insurance, upgrades and maintenance are all money you aren't spending. True wealth drivers.

[bendix]

My wife and I live in a very high cost of living area, $1.2M median house price. We are mid-30s and have been renting for many years and really would like to buy a house. Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many and we would like to garden and "make the home ours" via ability to remodel/landscape/etc. We have been looking and anything suitable will run approximately $7-$8k/month mortgage. There are a few cheaper options but they need six figure renovations that will just get us back to the $1.1M+ total cost range. We currently rent at a below market average of $2,300/month. The difference in our mortgage and current rent would be significant and would push us to the maximum 42% debt-to-equity the banks will allow. We have never come close to this debt-to-income ratio which makes me nervous but in this market I don't know there is any way around it. We really want to live here given we grew up here and most of our family is in the area. We could move but we would miss our family. We could buy a rental in a lower cost of living area as an investment property so we at least participate in some equity appreciation but then we don't accomplish the "make our house ours" objective. Just curious what your thoughts are. Thanks!

I think you may want to delineate these things very clearly. On the one hand there are the wants. You want to stay in a certain area. You want to use your house as investment. You want... this and that. And on the other hand there are the cans and shoulds. Can you afford it? Should you afford it given it would push you to the brink? Not always do these go hand in hand with what you want.

Then you can look at what you can buy and then see if you want what you can buy. If you cant buy what you wand and you dont want to buy what you can reasonably afford, stay where you are.

[quantAndHold]

42% debt/equity is a freaking lot. I did 34% once, and ended up getting roommates because I needed to paint the kitchen but couldn’t afford paint.

Anyway, you have a screaming deal on your current place. My suggestion would be to figure out what your payments would be on a home you would buy, including property taxes, insurance, maintenance, utilities… Then take the difference between that and what you’re currently paying every month, and invest it. A year or three of that will a) give you the feel for what that kind of outlay would be like, and b) increase the amount you have for a down payment. Having a bigger down payment helps in two ways. First, it reduces your mortgage and payments. Second, it gives you a leg up in a multiple offer situation. The seller is going to view your offer more favorably than someone who’s only putting 20% down.

[alex_686]

I know its FOMO. I can feel it. BUT, the "recession" I (and I am sure many other young buyers with no/little rollover equity) have been waiting for doesn't seem to want to happen. Even if it does will housing be affected? Seems against the logic of most users of this site to hope for a different future outcome than what has been the historical norm, which is why I feel waiting for cheaper prices is foolish. I do appreciate your thoughts however.

I work in risk management. I have spent the vast majority of my career waiting for the next recession. Mostly it doesn't happen.

I am risk adverse. I heavily skew my portfolio towards equities because intellectually I know it is the right thing to do.

I can make a solid case that home prices will fall by 14% over the next 2 to 3 years. This may happen or not.

I think buying a home is a decent investment. Not great so don't fear on missing out.

As such I would be inclined to do it if I felt I had adequate reserves and was planning on staying put for the next 10 years.

[smitcat]

really appreciate all the replies so far. there definitely seems to be a consensus forming.

Are there any opportunities to buy multi unit homes within a reasonable distance which can fill all these needs?
- offset some home costs
- allow some wealth building through ownership
- allow gardening customizing goals

[Jeepguy]

You say you want to “participate in what has been a huge driver of personal wealth for many”

Based on the numbers you provided, you will be far better off renting and investing what you will save on mortgage interest into the stock market, stock returns far exceed real estate appreciation. This will drive wealth accumulation without all the baggage associated with home ownership

[cchrissyy]

I know its FOMO. I can feel it. BUT, the "recession" I (and I am sure many other young buyers with no/little rollover equity) have been waiting for doesn't seem to want to happen. Even if it does will housing be affected? Seems against the logic of most users of this site to hope for a different future outcome than what has been the historical norm, which is why I feel waiting for cheaper prices is foolish. I do appreciate your thoughts however.

i wanted to buy after college and marriage, around 2005 when everyone was getting those interest only and no-doc loans, but we couldn't afford to "win" any bids in that hot market and got stuck renting.

the crash did come, and thank goodness we were not stuck underwater having to stay married and live in those houses for all the years until break even. what a nightmare.

even in 2008 when prices fell it was a stretch to buy. there were new tougher lending requirements and it took me until 2011 to make a purchase. but the good thing about a real estate cycle is things sit on the market a long time, and i eventually got a short-sale deal. 12 years ago is not that long! you can't just expect it's always a good time to buy just when you want it to be. but the cycles do come. keep saving and investing and apreciate your excellent rent price.

[pizzy]

combined annual income of $240k. no other debt. we have enough saved for the 20% down but that's it so we would finance 80%. any future reduction to interest rates would obvious help as we could refinance but I don't want to rely on that.

Frankly, a combined income of $240k doesn't support living somewhere the median house $1.2M

That's your issue. Two ways to solve:

1) Get higher paying jobs
2) Move and find similar paying jobs.

[marathonfi]

combined annual income of $240k. no other debt. we have enough saved for the 20% down but that's it so we would finance 80%. any future reduction to interest rates would obvious help as we could refinance but I don't want to rely on that.

You're really stretching it. Our HHI income is 350k and we felt uncomfortable with 800K homes. Monthly was 5500 when we were looking few months ago. Decided to keep renting in the next few years, and we're very happy with the choice.

[N10sive]

I am in a similar position as you. I really would like a home to start making my own but I’m saving so much in renting I have decided to wait to see if this recession will happen.

Waiting another year so I have even more down payment to put on the house.

Only issue is if this recession will happen and as you mention if housing will actually go down. It the market I am in it hasn’t dropped much and less people are putting their house for sale probably waiting for them to start appreciating again.

[FrugalConservative]

Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many

Yeah that ship sailed and may never return to port.

[Gecko10x]

42% debt/equity is a freaking lot. I did 34% once, and ended up getting roommates because I needed to paint the kitchen but couldn’t afford paint.

Anyway, you have a screaming deal on your current place. My suggestion would be to figure out what your payments would be on a home you would buy, including property taxes, insurance, maintenance, utilities… Then take the difference between that and what you’re currently paying every month, and invest it. A year or three of that will a) give you the feel for what that kind of outlay would be like, and b) increase the amount you have for a down payment. Having a bigger down payment helps in two ways. First, it reduces your mortgage and payments. Second, it gives you a leg up in a multiple offer situation. The seller is going to view your offer more favorably than someone who’s only putting 20% down.

I like this suggestion.

42% is way too much. We recently more than doubled our housing costs to 25%, and I would not want to go any higher.

[Dusn]

I’d just feel lucky that I had such an amazing deal on rent and keep that rental for as long as it lasts.

[goodenyou]

Home purchases can also be a huge destroyer of wealth.

If renting is cheaper, RENT. Build up your wealth and buy a house that you can easily afford in a few years. It will be much more satisfying.

The key is to save and grow your wealth faster than the real estate market and pounce when you are cash flush. It's not market timing. It's timing your life to the right decisions.

[hand]

Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many...

So the investment thesis is that outsized returns will continue for the 30 years you'll own the house? And those returns will be better than the stock market?

There's lots of reasons to buy a house, I personally wouldn't use investment returns to justify a lifestyle purchase.

[joechristmas]

Your current housing cost is $2,300 a month. I don't know what your taxes and interest would be, but if you borrowed just $800,000 you're looking at spending more than $5,000 a month just on interest each month. So, your housing payment would triple.

I personally would not triple my monthly housing expense just to be a homeowner. If you have the money and don't have to borrow to fund the purchase that is one thing, but this sounds like you can easily afford your current situation and you wouldn't be able to easily afford buying.

[400bicycle]

Just wanted to say, we live in the inner SF Bay Area, have always rented apartments, wanted to do some serious gardening, and can afford to buy, but decided instead to rent a detached home.

Rent is about half of what a mortgage would be for the property.

The owner says he does not intend to raise the rent, that he’s just happy the property is in safe hands - if he is true to his words, we will be very happy with our decision.

Sinking the difference between rent and mortgage into savings we think will ensure we are not priced out if we later decide to buy.

[goldenbrewer]

We are in a very similar situation. Current rent is $3400, buying a similar house would probably result in a mortgage somewhere in the ball park of $7-10k per month. We have been "in the market" for over five years now. It felt like we were chasing the market up, i.e. every time our income would go up, housing prices would move up even more. The "search" finally culminated this past year when we briefly achieved a combined HH income that we felt extremely comfortable with only for me to get laid off a few months later. I am planning on taking a hiatus from work for a while, and with interest rates and housing prices where they are (and rental prices) we are calling off the search for the foreseeable future. A few notes on the topic:

• We really like our rental unit. It has a backyard that we can do whatever we want with, so we have installed garden boxes. So just keep in mind that you don't necessarily have to buy a home to check that box. It might take a while to find a place like ours, but they are out there. Also just as a warning, it is a lot of work. You may like it or you may end up with a backyard filled with weeds. Maybe try container gardening or volunteering at a community garden first to get your feet wet.

• We have saved up a somewhat substantial down payment over the years. This down payment is now sitting in a MM fund earning ~5% interest. The interest covers about 1/3 to 1/2 of our rent, making the buy/rent calculation much more favorable to renting than it already is. And I am going to start moving this money into long term bond funds, so in the event of a recession/declining interest rate environment (which hopefully results in softening housing market) we should see some capital gains.

• With family nearby (as you seem to have), we have a "safety net" in case of a sudden eviction or substantial increase in rent. If we are forced out, for whatever reason, we can temporarily move in with family while we take our time finding a new place. It is worth mentioning that we have not had our rent increased at all, and the way the market is moving I don't not expect a rent increase in the foreseeable future. Additionally our landlord is a mom&pop and we are on good terms with them and they value stable, responsible tenants. So we feel fairly secure in our rental situation (and there are some statewide renter protections that hep with that as well).

• The low rent allows us to save a substantial portion of our income (even after the layoff). So in addition to allowing us to save more, we have also spent some money on upgrading appliances and other improvements on our rental. Spending $1000 on a new washer/dryer is a drop in the bucket compared to how much we spend on rent and how much we are saving on a mortgage.

• And last thought, in terms of mortgage/interest rates, if you are hoping to buy now and then bank on interest rates eventually going down in the future so that you can refinance and get a cheaper monthly payment. Well, the primary reason interest rates would go down in the future is in response to recession/economic trouble. So the way I see it, is if rates keep going up, housing is going to soften (because monthly payments are going to go up) and if rates go down, housing is probably going to soften (because economic weakness). I just don't see a macro scenario where housing keeps going up, maybe in a few isolated markets, but it is so expensive right now and it seems like the macro forces are working against it regardless of the direction rates end up going.

Long story short. It is really a no brainier for us to rent right now. It has been super frustrating being locked out of the market for the last 5 years, but I am now more comfortable with our situation than I have ever been in the past.

[onourway]

It's too much house for your income, IMO.

I presume, however, that your current rental and what you are looking at buying are not equivalent? What does it cost to rent an equivalent house? Or at least something nicer than you have now, that may fulfill some of those wants?

[soccerrules]

Keep renting. $5k per month less spent should be a "huge driver of wealth" if you save most of it.

The property taxes, insurance, upgrades and maintenance are all money you aren't spending. True wealth drivers.

+1

[Badinvestor]

Bogleheads are generally anti-real estate. The views of Americans in general are more favorable to real estate as an asset:

https://news.gallup.com/poll/505592/rea ... rises.aspx

I'm a bad investor, so I don't actually know whether homes or stocks will do better over the next ten years.

Millions of people have had to stretch badly to buy their first home, and wound up happy that they took the risk.

[stoptothink]

Bogleheads are generally anti-real estate. The views of Americans in general are more favorable to real estate as an asset:

https://news.gallup.com/poll/505592/rea ... rises.aspx

I'm a bad investor, so I don't actually know whether homes or stocks will do better over the next ten years.

Millions of people have had to stretch badly to buy their first home, and wound up happy that they took the risk.

This is not untrue, but that's kind of irrelevant to this thread. You don't need a crystal ball for this one, OP might not even get approved for a loan for a $1.1M+ home.

[Glockenspiel]

Just say no and you will enjoy seeing how this is a big down driver for many in terms of personal wealth in the coming recession.

KlangFool

People have been saying "coming recession" for more than 2 years. Are you sure it's actually coming? Or did we accomplish the "soft landing" off of COVID that we were hoping?

[toddthebod]

Just say no and you will enjoy seeing how this is a big down driver for many in terms of personal wealth in the coming recession.

KlangFool

People have been saying "coming recession" for more than 2 years. Are you sure it's actually coming? Or did we accomplish the "soft landing" off of COVID that we were hoping?

There will always be another recession.

[KlangFool]

Just say no and you will enjoy seeing how this is a big down driver for many in terms of personal wealth in the coming recession.

KlangFool

People have been saying "coming recession" for more than 2 years. Are you sure it's actually coming? Or did we accomplish the "soft landing" off of COVID that we were hoping?

Are you claiming that there will never be another recession?

If the answer is no, there will be a coming recession. The only question is when. And, whether you are prepared when it happened.

KlangFool

[ScubaHogg]

I know its FOMO. I can feel it. BUT, the "recession" I (and I am sure many other young buyers with no/little rollover equity) have been waiting for doesn't seem to want to happen. Even if it does will housing be affected? Seems against the logic of most users of this site to hope for a different future outcome than what has been the historical norm, which is why I feel waiting for cheaper prices is foolish. I do appreciate your thoughts however.

a) you don’t ever have to buy a house. With a deal you have you can become very rich just by renting

b) home prices don’t have to “fall”. They can just stagnate for a number of years and inflation will make the real value of the home much more affordable

c) local housing markets are even more volatile than national. I’m guessing you are in CA? They have had several busts over the decades

d) you are young I’m thinking. A few years seems like a lot to you, but not to others. Just cause a “recession” hasn’t happened in the timeline you want doesn’t mean it won’t happen

To say it simply, if you want to be poorer than you’d otherwise be, get rid of this great deal you have and buy too much house

[luminous]

My wife and I live in a very high cost of living area, $1.2M median house price. We are mid-30s and have been renting for many years and really would like to buy a house. Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many and we would like to garden and "make the home ours" via ability to remodel/landscape/etc. We have been looking and anything suitable will run approximately $7-$8k/month mortgage. There are a few cheaper options but they need six figure renovations that will just get us back to the $1.1M+ total cost range. We currently rent at a below market average of $2,300/month. The difference in our mortgage and current rent would be significant and would push us to the maximum 42% debt-to-equity the banks will allow. We have never come close to this debt-to-income ratio which makes me nervous but in this market I don't know there is any way around it. We really want to live here given we grew up here and most of our family is in the area. We could move but we would miss our family. We could buy a rental in a lower cost of living area as an investment property so we at least participate in some equity appreciation but then we don't accomplish the "make our house ours" objective. Just curious what your thoughts are. Thanks!

I also live in a very high cost of living area, median house price similar, and our rent controlled below market rate apartment is just a bit more expensive than yours. Our income was quite a bit higher before I semi-retired. We decided a long time ago to just keep renting. It has worked out phenomenally for us, our savings have allowed me to semi-retire and given us a lot of flexibility.

I think American societal norms really push us to buy a house, and for years it bothered me a lot that we didn't own. But for us, objectively, it makes no sense. Consider long term renting as a real viable option!

[pizzy]

Just say no and you will enjoy seeing how this is a big down driver for many in terms of personal wealth in the coming recession.

KlangFool

People have been saying "coming recession" for more than 2 years. Are you sure it's actually coming? Or did we accomplish the "soft landing" off of COVID that we were hoping?

Are you saying there’s a chance there is no coming recession? Ever?

[WhitePuma]

Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many

Yeah that ship sailed and may never return to port.

Please clarify. Are you suggestIng that home prices may never go up again?

[WhitePuma]

Part of the problem is that new construction is just way to darn big (often > 3,000 sqft) and thus expensive. Gone are the days of builders building a high quality, reasonably sized home (1,200-1,800 sqft). Thus, “The Missing Middle.”

[Nicolas]

combined annual income of $240k. no other debt. we have enough saved for the 20% down but that's it so we would finance 80%. any future reduction to interest rates would obvious help as we could refinance but I don't want to rely on that.

If one of you would lose your job what then?

[CaptainT]

House costs more then just the mortgage
Also insurance, upkeep, repairs, taxes,lawn care extra gas and electric bill.
Save the difference between what a house would cost and what your rent is every month for at least a year. Plus 1k that day every time you call the rental office for a repair. Put it in a specific fund that you invest in something like a s&p index fund.
At the end of a year ask yourself these questions
1. Were we happy with spending this much on hoisting?
2. Did we ever struggle scrimp or have trouble paying this?
3. Were we happy with the fiscal trade offs this entails?

Generally my advice is don't buy but try the experiment above. It will teach you if you actually want this enough to make it work plus it will get you a huge moving, closing cost, house emergency fund.

[vfinx]

I know its FOMO. I can feel it. BUT, the "recession" I (and I am sure many other young buyers with no/little rollover equity) have been waiting for doesn't seem to want to happen. Even if it does will housing be affected? Seems against the logic of most users of this site to hope for a different future outcome than what has been the historical norm, which is why I feel waiting for cheaper prices is foolish. I do appreciate your thoughts however.

A couple recent examples:

1. My house value (according to Zillow/Redfin) dropped over 20% from its peak in the last couple years. Admittedly that was a very short-lived frothy peak, but someone must have been transacting at those prices. Even when mortgage rates are factored in, I would much rather be a renter than someone who had bought at the peak. That buyer will never be able to refi away their overbid, or sell the house to get out of high interest payments.

2. Just before Covid my vhcol area had a quiet crash, that no one seems to remember or talk about. Prices dropped noticeably and there wasn’t even any acute event. It was just attributed to “buyer fatigue” because there was nothing else to tie it to. Transaction volume had dropped sharply, and prices were starting to follow, but then Covid hit so we can’t know how it would have ended. It’s quite possible it would have been a significant drop.

Anyway, I just mention this because it seems people only remember when prices go up.

[bd7]

Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many and we would like to garden and "make the home ours" via ability to remodel/landscape/etc. We have been looking and anything suitable will run approximately $7-$8k/month mortgage.

Just curious what your thoughts are.

I wouldn't totally dismiss the wealth building part, since even people that bought in the peak of 2006 have generally seen significant appreciation by now if they've been able to hang onto the home. However, the numbers for you are just too much of a stretch IMO, and instead you could save an extra $60k per year (25% of your income) by continuing to rent if that situation is stable.

[faanger101]

My wife and I live in a very high cost of living area, $1.2M median house price. We are mid-30s and have been renting for many years and really would like to buy a house. Main reasons for wanting to buy are to be able to participate in what has been a huge driver of personal wealth for many

If you believe that RE prices will keep climbing - buy. If not - rent. I think it's that easy

[sailaway]

In a situation similar to yours, we kept renting and saved the difference. For many, the house is where most of their wealth is due to the forced savings of paying the mortgage.

If gardening is important to you, have you looked for a community garden near you or looked for volunteer opportunities?

.

[DarkHelmetII]

+1 that's a big increase in housing cost. Even if home prices continue up you have massive savings right now. If home prices stay flat or certainly if they drop, then owing RE has become a wealth destructor as others have said

[runswithscissors]

Some questions...

Is the rent you are paying well below market? If so what's the market rent and what's the risk the landlord will increase rents over the coming years?

You mentioned median home price is $1.2M. That's roughly what it is in my city but $1.2M gets you a dump here. Is $1.2M a realistic price for what you folks want?

It's about $6,220 for a $960k loan at 6.75% (current jumbo rates). What do you estimate the insurance, property tax and maintenance cost to be per month?

Will you and your family's quality of life improve significantly in the home you plan to purchase vs the rental?

How have home prices performed over the last 20 years in your area? Have they doubled since precovid like some areas or has price growth been more moderate (say 30-40%) over the last 5 years?

Are you in or near a sunny area where electricity and gas prices are high? Solar is often a good option for people in these areas as owners (not renters) can prepay for their energy costs (both home and electric vehicle). In certain areas this can be $500-$1,000/mo in savings.

Are you a handy person or do you need to hire professional trades to do common repairs in a home?

Does the thought of having to move on short notice give you and your family significant anxiety?

There are a lot of non-financial benefits to homeownership that many people don't put a lot of value in. But there's no denying it's definitely going to be cheaper to rent in the short and mid term at the least. Question is if the quality of life improvements to you and your family are worth the additional expense and if you'll still have enough savings put away for retirement. One plus is that if rates drop in the future you can refinance and that would help the obviously undesirable current DTI