Read This Before You Run Out and Buy a House

You may have noticed that the housing market is active right now. The block is hot. And the cul de sac is even hotter.

Such heat might be motivating you to jump into the fye (meaning “fire,” for our non-Atlantan friends). You’re probably thinking, “Damn, buddy; it’s time for me to become a homeowner right about now.”

You might also be motivated by the fact that you live with your parents if you’re one of many Millennials who have not yet made the leap into home ownership. And there’s no shame in that, but yeah, we get it.

We ain’t even gon’ hold you. Owning a house is really only fun if you’re so rich you don’t even notice you actually own a house. Like Fresh-Prince-rich. Speaking of which, you know you can rent instead, right? We’ll come back to that another day.

That’s not to say there aren’t benefits, especially with today’s mortgage rates being so low. Make the right choice and your home could very well make you wealthy.

But prices are a bit high right now. According to a new report from online real estate broker Redfin, the national median home price rose 11.0% year over year to $328,400 in August. That’s the largest annual increase since February 2014.

And lest we forget that a mortgage is you telling your bank you’re going to make a pretty significant monthly payment, consistently and without fail, for 15 or 30 years.

Make the wrong choice and you might end up paying in more ways than one.

We’re certainly not telling you to buy a house, but we’re also not discouraging you. If you’ve looked at enough information and it makes sense, don’t let a newsletter tell you not to go for it.

We just know that money, contrary to what our friend Jermaine Dupri once famously told Jay-Z, is indeed a thing. And sometimes when markets heat up, it’s irrational, meaning it will not be sustained. There are things we think you should consider.

Being in the middle of a deadly novel pandemic, and not having a scientifically proven vaccine until this time next year, according to Robert Redfield, director of the Atlanta-based Centers for Disease Control and Prevention, is something to note, for a variety of reasons. Being in a recession is another.

It can’t be overstated that owning a house comes with additional expenses, which can be difficult to predict. Make sure you get a trustworthy appraisal and a really good inspection. Things fall apart; word to Chinua Achebe.

Those expenses don’t get easier to address if you find yourself out of work and dealing with other unexpected expenses (such as emergency health care in a pandemic).

We won’t even pause to discuss that secret voice in the back of your head, telling you that you deserve that new Lambo truck, which is indeed lovely. It’s probably not the wisest decision one could make though, especially if your credit and liquidity are mostly tied up in real estate.

All we’re suggesting is you should consider some things before jumping into home-buying. And there’s good information out there if you’re looking to purchase.

And it’s hard not to want to level up right now, right? Especially when folks like T.I. are telling you to purchase property.

Below is more information, in the form of recent articles you probably should read before letting some newsletter, or CNBC, or some hot Instagram real estate agent, or your auntie/uncle (who might also be a hot Instagram real estate agent) talk you into a 15- or 30-year financial commitment that’s bigger than it looks from the outside, like that beautifully renovated bungalow you walked through the other day.

First, get your mind right

Did you know that looking at too many available houses could lead to anxiety, which could result in you making a terribly rash decision? Chill.

Get organized

You, like everybody, recently cleaned out every closet in your current home. You should have an idea where the tax returns, rent payment receipts and other documents are, right now. Get them together.

Some people think the housing market is going to save the economy

This isn’t to say these people are wrong. If property values somehow continue to climb, lumber shortages end, and other positive developments come to fruition, then once again it indeed might be on. But this sort of thinking sometimes leads to irrational decision-making.

There are good and bad reasons to buy a house. Feel me?

Again, “hot” doesn’t always mean good.

The Federal Reserve isn’t in a hurry to raise interest rates

Jerome Powell, chairman of the Fed, said so yesterday. Take your time.

But yeah, folks are saying you definitely shouldn’t buy a whole house in a pandemic, my G

We’d be remiss if we didn’t put this link from Bloomberg in here.

We know. Feels very Debbie-Downer-ish. We’d rather keep it trill than put you in financial harm’s way. Just things to think about.

Hey, on the bright side, you’re saving money! Which is good. Tell that voice in your head that Lamborghini is making adult go-carts, and they’re under $2,000, if you’ve just gotta buy something reasonable to prove you’re grown.