Recent trends show that while home prices are decreasing in various cities, purchasing a house remains financially burdensome for many individuals. As a result, some are choosing to allocate their finances towards experiences and personal enjoyment rather than saving for a home. Business Insider seeks insight into how people are spending their money instead of investing in property.
Not everyone views homeownership as a priority. For some, the desire to travel and indulge in experiences outweighs the commitment of a mortgage. One user on a popular online forum questioned, “Am I crazy for thinking the housing market is cooked and that I’d rather live a little before locking myself into a mortgage?” This sentiment resonates with many who feel uncertain about the housing market.
Even as price growth slows—falling in some areas—affording a home remains challenging. High mortgage rates and substantial down payments continue to be significant barriers. According to data from Redfin, the average down payment reached a record $70,000 in August 2023. Many individuals have opted to redirect funds that would typically go towards a house into vacations and smaller luxuries that fit their current lifestyle.
For instance, Justin Ghio, a 36-year-old resident of San Diego, has chosen to rent a four-bedroom home with a pool for $3,895 a month. He and his wife have lived in this rental with their twin daughters for four years. Ghio noted that renting is significantly more affordable than buying in their neighborhood, where the median home sale price was approximately $916,750 as of November 2023.
In 2020, the Ghios attempted to buy a home, making offers on four properties. Despite a combined income of around $225,000—with Ghio working as a talent director and his wife as an esthetician—they were outbid each time. Initially disappointed, Ghio now feels relieved they did not stretch their budget to compete in a challenging market.
Renting has allowed the family to avoid costs associated with home repairs and maintenance, as their landlord manages these responsibilities. This financial flexibility has enabled them to allocate funds towards memorable family experiences, such as ski trips to Jackson Hole, Wyoming, and extracurricular activities for their daughters, including Girl Scouts summer camp and ballet classes. Additionally, it made planning their November wedding more feasible.
“I didn’t have to spend extra money on a down payment to keep my mortgage rate attainable,” Ghio explained. “Because of that, I was able to allocate my funds more freely to a wedding that checked all the boxes for what my wife was looking for.”
As housing remains out of reach for many, the question arises: if you are not saving for homeownership, what are you prioritizing instead? Business Insider invites readers to share their stories about spending choices. Interested individuals can reach out to reporter Alcynna Lloyd at [email protected].
