Buying Home vs Renting (Part 1)

The Emotional Side of a Home Purchase

The Emotional Side of a Home Purchase

This debate has grown largely over the Covid time frame. We justify buying a home because somewhere, there is some propaganda on how renting is wasting money and everyone needs to buy a home. “My mortgage would be less than my rent,” we often hear. The justification is born from an emotional place.

Emotional — from finding the home, walking the home and visualizing yourself living there. “The couch can go here and we can paint this wall as an accent,” she says. “I can put all my tools here,” he says, not knowing how to swing a hammer.

Because of Covid, the demand for wanting to buy a home went up. When demand goes up, price generally goes up. Especially when supply (amount of homes available) is low, which was the case across the country. This is where we saw some bad choices, crazy financial behavior and homes selling much higher than they typically would have. Being able to work from home because of was the driving force. In addition, many people were relocating from covid hot spots to “safer” cities or different states altogether. Furthermore, people were leaving states due to political reasons in response to covid and other matters, such as immigration and aboration. You may have kids and you want them to have a backyard to run around in.

The home is a status symbol. I personally know a couple who is not married and with no children, buy a 5 bedroom house. They have not even had the conversation about family or children yet and last year, it did not look like they even wanted to be together. But, they were both renting, separately. And yes, they followed the logic that the mortgage would be less than rent. As a result of the real estate market behaving the way it has, it has priced out other individuals and families, especially in premium markets, who could have purchased a home during a normal market.

Decisions based on emotion rarely turn out ok. Like when you snap back at your manager or partner. Or I had a long week and I reached for an extra 3 slices of pizza (don’t judge me). With the purchase of a home driven by emotion, it all feels good! Until 4 months in you can’t afford the mortgage payments and the maintenance and other hidden costs with owning a home. Which is exactly what happened to the unmarried couple I talked about above. Emotion is driven by pleasure. We will act in accordance with emotion to get what we want. Sex, drugs, alcohol, pizza, masturbation, a car or home we can’t afford. Because it all just feels good in the moment.

Dan Roman is a Husband, Father, and writer that releases a daily blog. A quick read on money, marriage, parenting, self-improvement, development and his thoughts. Dan is also Founder/Creator of Roman Solutions, a Personal Finance Firm that currently provides coaching and education.

To connect with Dan visit: linktr.ee/bydanroman

Or by email : financialdifference@danromansolutions.com