Most Americans want to experience the pride of ownership. And the personal residence is probably the most sought after asset. Although owning a home means mowing the grass, fixing leaky roofs, and replacing worn out furnaces, it is still something nearly every American desires. High inflation and interest rates have sometimes pushed the price of a home out of the range many beginning homebuyers can afford. Even so, creative financing, equity changing arrangements, and the like have made it possible for most Americans to own a home in recent years. No matter the cost, most attempt to buy a home as soon as they can.

But there are several issues to consider before rushing into the purchase of a home. Many have heard the myth that renting is simply throwing money down a hole, and that purchasing a home is the only smart way to go. But that is not always the case, depending on your particular economic condition and vocational situation. As we have often noted, it is important to develop a sequential investment strategy. When one graduates from college, starts in the work force, and begins to accumulate cash, he should resist the urge to jump immediately into a house without having an emergency fund and a significant down payment. Otherwise he will soon find he must use credit cards to buy many things he needs to operate the house and keep it going. This can start an unending cycle of debt.

A good goal is to pay at least 20% down on a house because that will allow one to avoid additional costs such as mortgage insurance. From a practical standpoint, this means one should save a little longer to buy that first house than he may have expected – or than is even normal among the rest of the world. But remember, God desires that His children be different.

Even if one has an emergency fund and a significant down payment, it may still not be economically wise to buy a home. In considering whether or not to buy or rent, one should take into account the nature of his occupation, the location, and his needs and goals. It may be that your vocation requires you to move every two to five years. If so, renting would probably be just as wise as purchasing. However, because of your family’s desires and ministry opportunities, owning a house may be more appropriate than renting.

Also remember to take into consideration buying costs such as loan origination fees, appraisal fees, tax service fees, attorney fees, points, and selling costs such as title insurance, which can amount to 2-3% or the original loan balance, and which must also be recovered in the appreciation of the residence. All of these provide a good case for needing to live in a house more than two years to make it pay over renting.

In summary, evaluate the purchase of a house with a long-range perspective and also in light of your vocation and lifestyle desires. Buying a house may be the American dream, but use wisdom in deciding whether it is best for you.