No, Your American Dream Does Not Need to Include Buying a House. Here’s Why.

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Let’s ditch this myth. 

Homeownership is extremely popular in the United States, with nearly two-thirds (65.5%) of Americans owning their own homes, according to 2022 data from the National Association of Realtors. If you’re a renter, you might have complicated feelings about it. Depending on your age, you may be surrounded by peers who own homes and lamenting how much you spend on rent every month, which could be much more than a mortgage payment on a comparable property, depending on where you live. You might also have well-meaning older relatives who urge you to buy, because “renting is throwing money away.” Is it though?

I’m hoping to buy a home myself in the next few years, after spending most of my adulthood renting. I bought a house once before, and it was a bad decision for a number of reasons, including my finances, my employment situation, and my lack of readiness to truly deal with the potential hassles of homeownership. Ultimately, I had to go through a short sale to get out from under the worst financial decision of my life, and I’m not eager to repeat that process.

Unlike the last time, I’m not interested in homeownership for the wrong reasons (such as hating my apartment and wishing to be seen as “a real grown up”), but because I have found a city where I feel at home and I want the opportunity to turn a piece of property into my dream house. Renting suited my life well until fairly recently. Here’s why your American dream doesn’t have to be geared towards homeownership.

Renting has its perks

There are all kinds of different rental situations. I’ve lived in rentals in multiple cities and states, from apartment complexes to small rural farmhouses. While they varied in substance, cost, and long-term viability (due to landlord issues or my continual need to relocate for my previous career), there were some perks these rental situations all shared.

Cost

First and foremost, renting is cheaper than buying. This may not be reflected in your monthly costs, but overall, it is. Think about it — you will not have to put thousands of dollars down to rent a home (likely, you’ll pay a deposit equivalent to a month or two of rent). You also won’t be paying for the costs of homeownership, which include property taxes, maintenance and repairs, and homeowners insurance (much costlier than renters insurance).

Saving time

In addition to all the money you’ll save on not buying, you also get to save time. In my experience, actual time saved by renting will also vary, based on where you live and who you’re renting from, but chances are good your landlord or a property management company will pick up some of the tasks you’d be doing yourself if you owned your place. This could include snow removal or lawn care, seasonal HVAC maintenance, and more.

Flexibility

I have moved many, many times in my life. Because I was a renter for most of it, I wasn’t faced with the prospect of needing to sell a house in a hurry (and potentially at a loss). In many cases, I didn’t even need to pay anything to break a lease when I changed jobs and had to leave a rental home. Owning won’t give you this kind of flexibility.

There are other ways to build wealth

Aside from the perks of renting, consider the fact that there are other ways to become wealthy besides owning property. Especially since even if you sell your home for more than you paid for it initially, you’ll also be contending with inflation, capital gains taxes, and more.

If homeownership doesn’t figure into your version of the American dream, you can take the money you’re saving by renting and invest it via a brokerage account instead. This will require more discipline on your part than paying a mortgage to amass wealth in the form of home equity, but it is certainly a viable option and shouldn’t be discounted as somehow inferior to owning your home.

Ultimately, the decision to buy a home is extremely personal, and shouldn’t be made by anyone but yourself and the others who will be going into the home purchase with you (such as a partner or spouse). If someone tells you that homeownership is the only way to achieve the American dream, you have my permission to tell them they’re wrong.

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