We’ve Failed to Educate Society on the True Costs of Homeownership. Here’s Why.

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Financial advisor Ramit Sethi has strong feelings about whether homeownership is really the American Dream. Here’s what he had to say. 

Writer and self-proclaimed financial advisor Ramit Sethi knows his audience. And what Sethi understands is that young adults are under incredible pressure to become homeowners, whether it’s the right move for them or not. Here, we take a look at Sethi’s comments on the subject to a follower on Twitter.

Homeownership at all costs

A Sethi follower wrote, “If 90% of people don’t understand the transaction costs of owning a house, we have failed as a society.”

Sethi responded, “We have not failed. We have achieved exactly what our society was designed to do: Create a culture and systems that encourage homeownership at all costs, stigmatizes and disenfranchises minorities, the young, and the poor, and discourages critical thinking about large life decisions.”

Whew! That’s a lot to unpack, but let’s focus on what Sethi says about homeownership at all costs.

Pressure to buy

Home sales skyrocketed during the initial phase of the pandemic, fed in part by the fear that interest rates would never again be low enough to allow the average household to afford a home of their own.

Sethi’s response to his Twitter follower mentioned a culture that encourages homeownership at all costs. The truth is this: It is difficult to understand the hidden cost of homeownership until you’ve already taken out a mortgage and live in the home.

There are few shocks like those faced by new homeowners as they realize how much of their money and time is eaten up by the upkeep and maintenance of their new domicile. Beyond the financial costs of homeownership, there’s the sense of wondering what may go wrong next.

If all a person has ever wanted is to own property and spend their time and money making it their own, homeownership may be a dream come true. But if someone harbors a different vision of life, it’s okay to say no to buying a house, no matter what society tells them they should be doing at this stage in life.

Freedom in saying no

We all have things that are expected of us in life, and we all carry secret dreams and desires. Bombarding a person with the message that they must become a homeowner becomes like white noise that can make them lose focus on what they really want.

If you would rather spend your time and money traveling the world, serving a community in need, sailing the ocean, or going back to school to become a veterinarian, your dreams don’t have to be disrupted by societal pressure that tells you buying a house is the most important thing you can do.

Home sales benefit a lot of people, from real estate agents to loan officers and home sellers. But that doesn’t mean you’re responsible for making it happen. You’re only responsible for living life on your terms and following your talents and dreams.

If you decide to take a page from Sethi’s book and take control of your financial destiny, that may mean not buying a house until you’re good and ready — if that day ever comes. Along the way, a constant drumbeat of voices will tell you that homeownership is the American Dream. But as former U.S. Senator Craig L. Thomas once said, “You stuff somebody into the American Dream, and it becomes a prison.”

If the idea of homeownership gives you the heebie-jeebies, maybe pull a Nancy Reagan and “just say no.”

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