They Traded $1,800 Rent For A $4,150 Mortgage, Now They’re ‘Having Panic Attacks’

More than anything, we need to redefine lifestyle in America — and like it

This type of reality makes me angry and a little sad. However, it also helps pave light at the end of the tunnel.

Today, we sum up the anger, sadness and refreshingly subsequent light.

Longish story short from an article I saw the other day —

Jonathan and Shalom in Seattle … just swapped their $1,800 a month rent for a $4,150 mortgage payment. As a result, Jonathan says he’s started having near nightly panic attacks and the couple is fighting over whether to buy furniture …

They bought based on real estate marketing and not what they can afford.

You can’t make this shit up. But you can predict it.

Marry the house, date the rate.

Sounds cute. But it’s outrageously irresponsible.

Apparently, Realtors and mortgage lenders across the country are using this line on prospective home buyers freaked out by the record high cost to carry a mortgage amid still outrageously high housing prices …

This idea of marry the house, date the rate basically means get the house now because, um like, you love it and get rid of the high rate later when you refinance your mortgage at a lower interest rate.

It’s not too difficult to imagine this scenario —

Prospective home buyers: We’re not sure. That’s a high payment.

Realtor: It is. But if you can manage it for a couple of years, housing prices will start going up again and rates will come down. You can refinance!

Prospective home buyers: Ah, okay, makes sense. We can stretch for a couple of years as long as we pay less after that.

Done.

You’ve pushed somebody with home ownership and the American dream on the brain into making an incredibly risky and potentially life-changing financial decision.

So easy to do. Because we’re conditioned to believe that buying a home is always the prudent money move. It takes very little convincing, even when we’re in doubt, to support something we not only have always believed (and come to take for granted), but desperately want to believe.

Of course, it doesn’t take a degree in accounting or economics to realize that you don’t just snap your fingers and refinance a mortgage — seamlessly, for free, or at all — the day after you buy the house.

But the more important matter at hand is why are so many people, so willing to jump into such an uncertain situation in the first place?

If you were able to enter the world at however old this couple is —

• with zero preconceived notions about home ownership as an alleged social and financial rite of passage …
• and somebody with a vested interest in you buying a home …
• with practically zero concern over what happens after you buy the house …
• if this random somebody told you that your monthly housing expense — only the payment — was going to increase by $2,350 …

— you’d end the conversation right there.

Because, unless you had just won the lottery, inherited a shit ton of money or increased your income by considerably more than 130.556% (and even then), you would consider it literal insanity to make such a precarious personal financial decision.

And you’d be right. Because it is. It’s nuts.

However, even though we’d be better off being dropped from Mars into the real estate agent’s office, we don’t have that luxury.

Instead, we have come up in a world where —

• 82.4% of homeowners enjoy mortgage interest rates under 5%.
• 62% come in under 4%.
• 23.5% below 3%.

With today’s rate being — 7.21% (though that could change by the time you read this).

And, of course, so many of these people in presumably (or, at least, relatively) excellent housing situations bought before everything — prices, interest rates — went completely crazy.

All of us have come up in the same world — renters, homeowners in good positions, homeowners in not-so-good positions. The same world, if you look backwards.

At the people who already did it. Who maybe stretched, but not quite as much you’d have to stretch today. The way this Seattle couple stretched. And are stretching themselves, not only financially, but physically and mentally.

Looking backwards at Grandma and Grandpa, maybe Mom and Dad, aunts, uncles, even cousins and friends who officially became contributing to society adults when they gave up the horrors of renting — of apartment living — and bought a house.

This is the prevailing lifestyle for many Americans — do everything you can to become a homeowner. Because home ownership is the lifestyle. And doing whatever you need to do to become, to be a homeowner is the culture.

Hustle culture.

Grinding culture.

Taking a chance on a meme stock culture.

Play the part, poser culture.

Don’t live in a little apartment and drive a modest car culture.

Upward mobility culture.

Every parent, family member, friend, media person, money guru who talks shit about apartment living needs to stop.

Every parent, family member, friend, media person, money guru who says you need space for a home office or for your kid to play or for your dog to take a piss needs to stop.

Every parent, family member, friend, media person, money guru who laments throwing money away on rent needs to stop.

Every parent, family member, friend, media person, money guru who makes all else equal, purely economics 101 home equity and net worth arguments — void of any emotion or understanding of life in the day to day — needs to stop.

Because they’re slowly … actually, they’re speeding up the process of killing America.

If that couple kept that $2,350 in their pocket they’d be better off. We’d all be better off.

$2,350 a month equals $28,200 a year. In 10 years, that’s $282,000 without even earning a little interest on your money.

If you keep an $1,800-a-month rent payment, it needs to go up 30.5% before it equals the savings you realized by not listening to that irresponsible, borderline criminal real estate agent.

If you have an otherwise low cost of living, you can skate through life in the near-term and — quite possibly — long-term. At least relative to “having near nightly panic attacks” and getting into fights over buying furniture for your too much house.

But to make all of this stop, America requires a mindset shift. A big one that — as it stands — feels impossible.

What’s so bad about …

• living in an apartment?
• going to the park instead of your backyard?
• walking in your neighborhood instead of on a third bedroom treadmill?
• working at the kitchen table, in your bed, or in the corner of the living room you carved out for a home office?
• driving a Hyundai instead of an Audi?
• banking money so you can increase your personal financial runway?
• waiting to buy a house until it makes you better off financially today and for the duration than you were yesterday?

This is how we need to start thinking in America. Or we’re screwed.

How messed up is our society — generally speaking — when we’re willing to bite off way more than we can or probably should chew simply to say we bought a house? To say we “own” a home. To not have to take condescending, judgmental shit from Mom and Dad.

Are the extra rooms we can’t adequately furnish or the fake patio grass that smells like urine within two months — tops — worth the stress of adding $2,350 to our monthly budget just because a real estate agent told you it’d be temporary?

If what these folks in Seattle did — or anything close to it — is what you have to do to buy a house, you have no business buying a house.

We have to find a way to change the narrative that home ownership is the only way. We have to find a way to not react with disappointment because this or that group of households has been priced out of the housing market. We have to find a way to make it attractive to choose cash in the bank over home equity.

Because keeping money in people’s pockets — by promoting reasonable costs of living that might include renting (at least for the time being)—works for all involved. It can reduce stress if the pockets in question are yours. And it can help the economy if that extra cash isn’t going to towards mortgage interest or a poorly executed refinance (actually both!), but it’s being spent in local communities.

Ultimately, we have to find a way to stop framing home ownership as a financial goal. As a rite of passage into adulthood. As a status symbol. As a creature comfort. As an escape.

We have to create a society perfectly okay with home ownership when the time is right. Not as the end all and be all. Not home ownership for the sake of home ownership because that’s how it has been for the last 60 or 70 years. Because the time isn’t right and the last couple of years aren’t anything like the previous 70. Not even close.

We have entered a new world — maybe a new normal — on housing.

This new normal requires a society that views home ownership as something you get into if it’s a financially sound decision today. As in you don’t have to wait 5, 10, 15, 20 years to see the benefits. You see them now. Today. Immediately. Because the decision to become a homeowner kept your cost of living constant or lowered it.

As individuals we have to find situations where — in due time — we can turn this more prudent vision into reality.

Here’s how I’m handling it —

If you aren’t presently all set on housing or think you might not be in the future, it’s time for you to find a way to handle it.

To find a way that best suits your personality, tendencies, dreams and desires, not to mention your financial situation and, more importantly, your financial capacity and capacity for life change. What are you willing — and not willing — to do to have the most manageable housing expense and comfortable monthly budget now and going forward?

That has to be the new, healthier line of questioning we ask ourselves. That our parents and friends and pundits ask us.

Not what do you have to do to get into that house?

It’ll be better for us as individuals — financially, physically and mentally.

It’ll be better for us as a society — financially, physically and mentally.

If you’d like to know more about the journey I’m on, follow me on Medium.

You can also subscribe to my Never Retire: Living The Semi-Retired Life newsletter where I chronicle my big decisions on lifestyle, housing and cost of living, which includes moving to Spain sooner rather than later.

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.