Ask 10 different people whether buying a home is affordable and you’ll get 10 different opinions. But is it really that unaffordable to own a home today? The truth is, you’re not going to find out for yourself unless you just do it because it’s different for everyone. Of course there are ways to make sure you’re giving yourself the best possible chance to make it work for you.
It’s a generational thing
The first thing you need to understand is that the golden age of home ownership isn’t over, it actually never really existed. Generational perspectives are often biased and can be detrimental to first home buyers. When young home buyers seek the wisdom of veteran owners, it’s easy to see why they become discouraged. In the late ‘70s and early ‘80s, the house price to salary multiple was 4 times, ours is 10 times. That sounds like an unfair advantage but to say that they were completely without struggle is untrue, for example, they had 17% interest rates while ours are at around 4.5%.
The important thing to keep in mind is that through the 80s, 90s and 2000s, the game has pretty much stayed the same. Regardless of what you’ve been told, the ones who came out on top are the ones who put a smart strategy in place and have the discipline to stick to it.
Your time is now
Affording a new home relies on a number of variables and at the end of the day, there’s only really one way to find out. And that’s to do it. It’s not going to be easy, it never has been and the unfortunate truth is that it never will be. If you want to build wealth and financial security, you will have to make some sacrifices and that’s precisely why owning a home is so rewarding – because not everybody can do it.
If you have the ambition, the dedication to making some sacrifices and most importantly, the know-how, owning a home can be as affordable as it is satisfying.