The Best in Life is Free
Image by Pezibear on Pixabay
So many young people want to buy a house, but the price of real estate is so high that it seems unattainable. They feel like failures, comparing themselves to generations before them—grandparents, parents, aunts, and uncles. But failure has nothing to do with it. It’s about circumstances. Financially, it was a different world back then.
To put it into perspective, let’s go back to 1977—the year we bought our first home. The two-bedroom summer camp sat on about an eighth of an acre on a dead-end dirt road. It had a crawl space for a basement and the heat came from a unit built into the side of the kitchen stove. We paid $21,500 for that little starter house, which was just about our combined annual income at that time. The monthly mortgage payment— principal, interest, real estate taxes, and mortgage insurance—was $204 plus change. To compare, the rent we had been paying for our second-floor tenement was $40 a week including heat, so it wasn’t too much of a stretch to buy our first house.
The principal of a mortgage is no longer equal to one year of pay
Over the sixteen years we lived in that house, we put in a new bathroom, kitchen, and heating system, and added a second floor. We attached a two-and-a-half-stall garage with a mud room, and a deck extending the full length of the house. We topped it off with red cedar siding, a new roof, skylights, insulated windows, a paved driveway, a fenced-in yard, and beautiful gardens. Except for the driveway, we did it all ourselves, so we paid for materials but not labor. When we sold that house, we rolled the profit into our second home, and again, the principle of our mortgage was just about what we earned for annual income.
We’ve always lived in Massachusetts, and currently, the average price of a home here is $699,900. How many people earn that for annual income? Few couples bring that much home combined. Rent is astronomical, so how can they save for a downpayment? And I can’t remember the last time I saw a new development of starter homes—it’s always big houses.
The game seems stacked against the average person
If a couple can somehow manage to qualify for a mortgage, can they afford to have a life? Go out to dinner, see a movie, or take a vacation? Can they even furnish it? And what about parenthood? How can they afford daycare, or for one of them to stay home and raise the kids?
The game seems stacked against those who bring home an average paycheck. It’s hard to not feel like a failure under these circumstances. But what is failure? And what is success? The definitions are different for everyone.
Several years ago, watching a duck swim in circles eating insects, I realized that all that duck had to worry about that day was finding something to eat, and it made me wonder what we’ve done to ourselves. We work hard to afford the things we want, and then work endless hours to keep them, when in the end, possessions are the things we cannot take with us when we die.
A home is important. The House can come later
We are taught that owning a home is the be-all and end-all, but it’s not worth ruining your health or your relationships over. Goals are important and we should never give up on our dreams, but a home, whether rented, leased, or owned, is what’s important. Be patient. The house can come later. Gratitude is an amazing thing because it turns what we have into enough. And there’s always something to be thankful for because the very best that life has to offer—the things we hold in our hearts—are free. And completely attainable.
Until next time,
Jean AKA The Strategic Chicken - making life’s journey one strategic step at a time
