Money in the bank or homeownership: What should this couple do?

Question: Regarding your November 25, 2023, column titled “This holiday advice is not the best recipe for wanna-be homebuyers” on The Mercury News and East Bay Times websites:   

Your column indicates home prices will not drop with lower home-loan interest rates. The experts agreed. Just like the uncles in your article, my in-laws provided homebuying advice. We listen. In our case, realty advice and down payment assistance come as a package.    

My wife is content to rent a home indefinitely. She prefers money in the bank. It is not surprising. Foreclosure ended homeownership for her parents during The Great Recession. Her parents had a bad home loan. They did recover. They have been renting since 2010. My in-laws saved all their disposable income. Now, they want their daughter to buy a home. But there is a catch. Her parents want us to wait until interest rates are lower. Then they will give us down payment assistance.  

It is a housing dilemma. My in-laws want us to buy a home when home loan interest rates are lower. My wife is happy to rent. According to the experts in your column, home prices will be higher when interest rates are lower. How should I proceed?

Answer: I once brokered an equity-share agreement. I was the buyer’s agent. The buyer-investor paid the down payment and closing costs. The buyer-occupant paid all the monthly costs. Five years later, the parties refinanced the property. The buyer-occupant bought out the buyer-investor’s ownership share. The buyer-occupants live there today. Please note: The property has increased 10 times in value from the original purchase price.

You and your wife need to review the classic rent-versus-buy discussions. Take your time. The pros and cons for each category are aplenty. Consult a tax adviser. Your loan officer can help, too. Home equity accumulation might capture your wife’s attention.

On November 29, 2023, Jordan Levine, the chief economist for the California Association of Realtors, delivered another outstanding presentation. This time, it was in the heart of Silicon Valley. The Santa Clara County Association of Realtors was the host. Real estate economist Levine said, “Why am I still optimistic? … Homeownership is still the best bet … as an American household, to get ahead in life.” In conclusion, “Suffice it to say that the only people who have any wealth in this country are the people who own their own home. That’s not a coincidence.”

Levine, the chief economist for the California Association of Realtors, and his research team forecast an increase in California home prices for 2024.

Lawrence Yun is a chief economist and senior vice president of research at the National Association of Realtors. He also spoke via a video call. Yun’s presentation to the Santa Clara County Association of Realtors included an interesting graph. It was a wealth comparison. The source is the Federal Reserve Survey of Consumer Finance. The median net worth of renters was $7,300 in 2019 and $10,400 in 2022. The median net worth of homeowners was $295,500 in 2019 and $396,200 in 2022.

Your in-laws can ignore the experts’ advice. Your wife might reject her parents’ offer. Remember, countless Americans will never realize their dream of homeownership. Renting is a hardship for millions. Whatever happens, remain thankful. There is no utility in becoming regretful.

Questions? Or are you or someone you know navigating life’s transitions? Let lauded negotiator Pat Kapowich make your next move easy. Visit Kapowich’s website for free area housing data, insights and trends. Or put his artful blend of specialized credentials, decades of experience and endorsed skill set to work for you. Kapowich instills confidence when buying, selling, relocating or resizing homes. Do not just make a move — make the best move. Contact him today, Realtor Pat Kapowich, a career-long consumer-protection advocate. 

Office: 408-245-7700;


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Author: Pat Kapowich

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