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Steve Diggs
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Steve Diggs presents the No Debt No Sweat! Christian Money Management Seminar at churches and other venues nationwide. Visit Steve on the Web at or call 615-834-3063. The author of several books, today Steve serves as a minister for the Antioch Church of Christ in Nashville. For 25 years he was President of the Franklin Group, Inc. Steve and Bonnie have four children whom they have home schooled. The family lives in Brentwood, Tennessee.

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no debt no sweat!

Home Ownership: To Buy, Or Not To Buy?

By Steve Diggs
No Debt No Sweat! Financial Seminar Ministry

CBNMoney.comI do some of my best thinking in airport terminals.  (Maybe that’s because I spend so much time in them!)  Presently it’s Saturday afternoon and I’m waiting for my plane from Nashville to Detroit where I’m due to present the No Debt No Sweat! Christian Money Management Seminar at a church tomorrow.  My mind keeps wandering back to an email I received earlier in the week from someone who had read one of my articles.

The lady was concerned about her adult daughter who was about to purchase a house she simply could not afford.  In desperation the mother wrote me asking for advice on home buying.  So here goes…

Today, home ownership in American is at an all-time high.  According to the Heritage Foundation, prior to World War II less than 50% of Americans owned the homes they lived in.  But by 1950, the postwar boom saw home ownership catapult to a record 55%.  By 1960, the numbers had risen to 60%.  Finally by late 2000, 68% of all Americans owned their homes.

Compared to the population as a whole, homeowners have far greater financial security.  A survey found that while the median net worth of renters was only $4,200, the median net worth of homeowners (counting both their homes and other assets) was an unbelievable $132,100. 
People in America aren’t shy about moving either.  According to the National Association of Realtors, most homeowners sell their first home within 5 years.  Second time buyers usually stay put a little longer—usually 7 to 11 years.  And, in the course of a lifetime, many of us will own 4 different homes.

But the simple fact is:  No matter how great home ownership is, it isn’t for everyone.  Even most real estate agents will admit this in their more lucid, honest moments.  There are all sorts of good reasons to buy a home—but there are some equally good reasons to wait.  Home ownership is a huge decision, and it shouldn’t be taken lightly.  Jesus warned that prudent people “count the cost.”  Although He was talking about discipleship, that’s pretty good advice for home buying, too.

Renting (or, even living with family) is sometimes the best option.  I believe there are at least six times when renting may make good sense:

  1) When your future is uncertain and there is a likelihood that you will move within a couple of years.  Granted, some homes appreciate in value quickly, and there are cases where people have sold homes shortly after buying them and made a profit.  But that is the exception—not the rule.  When you factor in loan and closing costs, moving expenses, and other outlays, it usually takes at least 2 to 3 years before a home can be resold at a profit.

  2) When you are in a sellers’ market.  Real estate is like most other investments—there are better times than others to buy.  Occasionally, people find themselves dealing with market conditions that make home buying dangerous, especially if they hope to resell their home at a profit in the near future.

This is what happened in the late 1990’s in the Silicon Valley area.  Because of the unusual growth in the high-tech world, homes in that area of California became so pricey that average folks simply could not afford them.  There were reports of little two-bedroom cracker boxes fetching over $500,000.  But, many of those tech savvy folks proved to be less savoir-faire when it came to financial matters.  Some of them jumped headlong and purchased these overpriced houses.  And, then the bust of Spring 2000 hit!  Suddenly, all those promises of unbridled stock value growth in many of the high tech firms began to crumble.  Housing prices fell—and people found themselves stuck with houses they couldn’t even sell at break-even prices.  The “smart” people who had invested so heavily in those dot coms started looking, well—dot dumb. 

3) For the first year or so of marriage.   I like to see newlyweds take their time making major decisions regarding family and housing.  No, I’m not saying that a newly married couple shouldn’t have a baby or buy a house.  But, I do believe it usually makes sense to go slowly with life-forming decisions.  The first months of marriage is a time of celebration and getting to know one another.  Although you may have dated and been engaged for a considerable period of time, there’s still a lot of learning to do.  Both partners learn that their spouse has likes and dislikes they never knew about.  This usually isn’t the best time to add the frustration of home buying to the mix. 

Here’s a Tip:  To get a rough idea of how long a newly married couple might choose to wait before buying their first home, subtract their age from 80.  Then wait a week for each year.  For instance, if you are married at age 25, subtract 25 from 80.  You might consider waiting about 55 weeks, around a year, before buying that first home.

4) When cost is a major consideration.  Frequently, you can expect that owning a house will cost more that renting—especially in the first few years.  Even if your mortgage payment is no more than the rent, there are other costs to consider like homeowners insurance, property tax, yard mowing, landscaping, and maintenance. 

5) If you hate doing maintenance.  Remember, when a light bulb burns out in your new home, there won’t be a maintenance man to come and replace it.  Jobs like mowing the yard, shoveling the snow, fixing a leaky roof, repairing a broken dishwasher, and cleaning the gutters are all responsibilities that come with homeownership.

6) When there is excessive debt.  Since I hate debt so much, it probably won’t surprise you that I like to see young couples delay home buying until excessive consumer debt is paid off—or, at least under control.  Believe me, the joy of home ownership can evaporate very quickly when bill collectors are ringing the doorbell every evening!


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