For many people, the 2008 recession morphed the American Dream into a living nightmare. The housing bubble popped, interest rates on mortgages skyrocketed, and a record number of homes were foreclosed on. Many millenials like me who were finishing school at this time and ready to jump off the cliff into a precarious adulthood came to the conclusion that home ownership was risky business. I chose to find an apartment, and I would encourage everyone in my age and income bracket to find an apartment as well. Rent–I repeat–rent, do NOT buy, for the following reasons:
Renting is cheaper. Compared to people paying towards owning a home, renters save approximately $560 per a month. A lot of people would argue that while it’s true rent prices are usually cheaper than mortgage payments and property tax, you’re throwing your money away and not building any equity. To that we say equity is often a poor investment! Depending on the housing market, neighborhood changes, and unforseen structural problems, a house can depreciate in value pretty easily and then you’re left selling at a loss. What’s more, a lot of mortgage deals basically involve paying the bank a premium for the first five years, so if you decide to move within those five years (and one third of homeowners do), you haven’t built up any equity at all. Which brings us to the second reason you should just find an apartment…
Apartment rental is more flexible. I think the thing that scares me the most about a mortgage isn’t the higher cost per a month. It’s the fact that you’re essentially tying yourself to one location and one kind of life for the next two or three decades. Maybe in my grandfather’s generation, when trade unions were more powerful and minimum wage actually paid for things, a person could enjoy that kind of job security.
But watching the American Dream crumble around me when I was young taught me that mobility and adaptability is the key to survival. I need to be able to sign a short lease on a city apartment, then, when my start-up company fails, move into one of those Philly lofts with four roommates and try to make the best of it. Eventually, maybe I’ll rent a luxry apartment by a lake, then get bored with fishing and research the best apartments abroad. None of these potential life decisions are conducive to carrying around a mortgage like a weight. Finally…
Apartment living is more convenient. Every homeowner I know is in a constant tizzy over their cess pool, their garden, the new kitchen counter they want but can’t afford, the probable termite problem, or the guys who messed up putting in central air. It just seems like homeowners have to spend a ridiculous amount of time and energy worrying about where they lay their heads, whereas most people who rent apartments, particularly in reputable complexes, just have to call the land lord when something goes wrong and they will take care of the problem. Often, the cost of general maintenence, land scaping, and faulty appliance repair is even included in the price of your rent!
As a twenty-something workaholic constantly on the move, I can’t afford my parents’ American Dream. I define myself by what I do and how I grow, not where I live. The less hassle and cost attached to my place of residence, the better. Rent, People. Just do it.
