I Wanted to Buy a House in 2023. Here’s Why I Changed My Mind

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Take a deep breath and really consider a major purchase. 

Homeownership is very popular in the United States, and nearly two-thirds of Americans own their homes. Unfortunately, it isn’t as easy to buy as that number might suggest. The last few years have presented challenges for people who dream of a home of their own.

With the onset of the COVID-19 pandemic in early 2020, many people living in dense urban areas took the opportunity to buy homes in quieter parts of the country, and they got to take advantage of a period of lower mortgage rates as well. This also resulted in extreme competition in the housing market, with some buyers resorting to all-cash offers and not even viewing homes in person before making those offers. Higher prices followed, and just to add insult to injury, we’ve been watching mortgage rates climb in 2022.

Per Freddie Mac, we started off the year with 30-year fixed-rate mortgages averaging 3.22% during the first week of January. As of this writing, the average rate for that same mortgage is 6.58%.

With an initial mortgage rate that low, it’s perhaps no surprise that I started 2022 with an itch to buy a home. I’ve been renting most of my adult life, other than a 26-month period where I lived in the home I shouldn’t have bought. My original plan was to buy again in 2023, but I changed my mind. Here’s why.

I got a money reality check

2022 was a year of big financial changes for me, and one of the first ones I made was beginning to meet regularly with a financial planner. You can seek money advice from all kinds of sources, and I think talking about money with everyone in your life can be a smart move. But there’s really no substitute for a neutral third party who has no personal stake in your finances and is just there to crunch numbers and offer solid advice.

At the start of 2022, I was also looking for a side hustle to be able to start saving up a down payment. I was also in debt and hadn’t connected the dots that paying off debt would in turn free up more of my income (as well as any additional money I could bring in) for a house. Plus, it would improve my credit score, making it easier to get approved for the best mortgage rate available. I have no one else’s income or credit to rely on, and will be buying a home solo. After a frank discussion with my financial planner, I resigned myself to renting until 2024. This brought on a brief period of depression about my status as a renter, but I made some changes that helped.

I made my rental more of a home

In my old career, moving from rental to rental (and often state to state) became a way of life. It’s exhausting to pack up and move as frequently as I have (current record: three times in less than one year). Being comfortable at home is vital to my health and happiness, but at the beginning of 2022, I was having issues getting there in my current rental. My financial planner encouraged me to make affordable changes to the space to make it somewhere I wouldn’t mind living for longer than originally planned.

I turned a spare bedroom into my home office, which cost me several hundred dollars in paint and furnishings, but it’s been a major win for my work productivity and therefore my bank account. I also made other strategic changes to improve life at home overall, and since my rent isn’t expensive, I can be content staying here and saving money until 2024 — and hoping the housing market cools off.

I spent 2022 watching the market

Working as a personal finance writer and editor means that I am submerged in all the latest money news, and that includes the roller coaster of a housing market we’ve seen this year. The average home price stood at $379,100 in October 2022, and while home prices are much lower than that where I live (an inexpensive small city), buying a home is still likely to be the biggest purchase I’ll ever make. Plus I’ve got to figure in taxes, homeowners insurance, and all the other costs of homeownership.

By the end of 2023, I should have an easier time assessing how 2024 will look, and by then I will only be a few months away from formally starting my search by getting pre-approved for a mortgage and finding the right real estate agent. By waiting longer, I’m giving myself the best chance to save money for a down payment, continue to increase my income, and otherwise prepare for a big purchase. I’ve already decided that if mortgage rates haven’t improved much by early 2024, I’ll consider getting an adjustable-rate mortgage — going into it with eyes wide open and a plan to refinance to a fixed-rate mortgage when I can.

While I’m disappointed not to be buying a home next year, I am happy to be approaching the process in a measured and careful way, especially because I didn’t last time. And I definitely feel very fortunate to have a safe and affordable rental for now. Becoming a homeowner isn’t something anyone should ever take lightly, because it’s a huge commitment with a major impact on your finances.

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