Should I buy a house now?
The short answer
Buy if you'll stay 7+ years, have 20% down plus 6 months reserves after closing, and the total monthly cost is under 30% of take-home. Otherwise rent and invest the difference.
Signals to weigh
- 01Job stability and geography — could you get relocated in 2 years?
- 02Full monthly cost: mortgage, taxes, insurance, HOA, maintenance (~1% of price/yr).
- 03Reserves post-closing cover 6 months of that full cost, not just the mortgage.
- 04Local rent-to-price ratio — under 5% annual rent/price favors buying, over 7% favors renting.
How to decide
- Step 1Compute the full monthly cost, not just PITI. Add maintenance and opportunity cost of the down payment.
- Step 2Compare to renting the equivalent place and investing the difference at 6%.
- Step 3Get pre-approved but don't shop until reserves are in place.
- Step 4Only make offers on homes you'd still want if prices dropped 15%.
Framework used
Cost-Benefit Analysis →Full walkthrough of the framework, with examples and pitfalls.
Consider these alternatives
- ·Rent for 12-24 more months, invest the down payment, revisit when reserves and stability align.
- ·Buy a smaller starter place you'd keep as a rental if you moved.
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