I am a member of the Middle Class, and I have never owned my own home. Granted, my decision to rent was by choice. I used to work in radio broadcasting, which required me to move all over the country to take new jobs. In a span of 20 years, I probably moved 20 times. Now I have "settled down", changed careers and have lived in the same spot for about 5 years. My wife and I plan to buy our own home in a few more years.
But, according to this article on MSN.com, many members of the Middle Class may never own their own home. In a nutshell, affordable homes are increasingly out of the reach of many families because their incomes are not keeping pace with increasing home prices. The record number of recent home foreclosures further underscores the fact that many people purchased homes they simply could not afford.
I agree with some aspects of the article, but a couple of thoughts struck me: why not buy a home you CAN afford (the proverbial "starter home"), or simply move to an area where housing is cheaper? I'm not talking about moving to a sketchy area of town. I'm talking about a lifestyle change.
My father-in-law is doing this. He and his wife currently live in New York City, where they both work. They plan to retire in a few years, but in the meantime, they have purchased a home in Oklahoma City. They plan to retire there, and the cost of living is much, much cheaper than New York, which will help them stretch their retirement dollars. They paid about $148,000 for their 1,800 square foot home in Oklahoma. In New York, they probably would have paid about $500,000.
The cost of living is one of the reasons I moved to Oklahoma. I also lived in New York. Although I took a 20 percent cut in salary, my cost of living plummeted once I left New York. I found it was easier to meet my living expenses on less salary in Oklahoma. Sometimes, downsizing your life can result in gains in the QUALITY of your life.
People might have many reasons for staying in a high-cost area of the country: family, friends, jobs, etc. We weighed these options before we moved...and to be honest, we have kept in touch with our friends (and made new friends), our family comes to visit us and my wife and I both found new jobs which were much better than what we were doing before we moved.
The saying is true: sometimes less is more.
(This post is quoted on MSN.com's Smart Spending Moneyblog.)
Posted by T | 4:29 PM | home ownership, housing, rent | 2 comments »