‘The Big Movement’ is a MarketWatch column that looks at real estate entries, from navigating in search of a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Want to know where your next move should be? Email Jacob Passy at TheBigMove@marketwatch.com.
I have lived in my house for 40 years. I live on 5.25 acres, and went to town to subdivide the land into a subdivision and allow it.
I like where I live, but the house is getting old and the kids are gone. I am a 58-year-old nurse. I pay $ 800 a month in property taxes plus my mortgage, which together is $ 2,500 a month.
I was offered a good enough sum to sell my house for $ 500,000 more than two years ago. I had another house that I liked and would buy, so I wanted to sell. But the sale hit my house, so I had to leave the house I wanted to buy.
Now there are no houses for sale and I have found nothing that pleases me. So I would have to rent until I found something. Should I do that? Or just wait until more houses appear on the market and sell when I find something? I probably won’t get that much but the houses won’t be that expensive to buy either. Isn’t everything the same?
It would be good to spend money, vacation and not work so hard. But I also don’t want to stay in rent paying as much as I was when I owned my house and be unhappy because I rent g in a place where I don’t want to live.
I like my house where I live! But the property taxes are just too expensive, and I am approaching retirement and will have to sell. I still owe money to my house and will not pay it before retirement unless I relocate.
Homeownership costs are rising rapidly across the country, so you don’t just feel burdened.
A recent study by property data firm Attom Data Solutions found that for the average homeowner owning a home is only affordable in 41% of counties nationwide. In other words, in the other 59% of counties across the district, the average family would need to spend more than a third of their household wage on housing expenses, including mortgage payments and property taxes.
Many vendors are in the same ship as you. They would sell in a heartbeat – if they could find a home to buy. The inventory of homes for sale is very cheap, and that creates a bit of a cruel cycle. Home sellers are reluctant to put their properties on the market because they hardly guarantee that they will have a home after the sale is over.
Renting may seem like a one-way ticket to saving, but that’s not at all certain. You don’t say where you live, but it’s a decent chance that you don’t rent much cheaper. In fact, rents in suburban and rural areas have risen sharply in the midst of the pandemic as families have sought more space to live outside major cities. A separate report from Attom Data Solutions found that owning a three-bedroom house (at the average home price) is cheaper than renting a three-bedroom home across nearly two-thirds of the country.
There are certainly other disadvantages to renting. You have no control over your future housing costs, so while you may be able to pay the rent for the first year, there is nothing to prevent the landlord from processing it when you renovate. And when you own a home, you build up a valuable financial asset.
A recent study found that owning a home is even more affordable than renting through nearly two-thirds of the U.S., despite rising house prices.
With rent, any money you spend is not returned to you. Even if you do have lower monthly costs, it works a lot with what you do with those savings. Ideally you would invest it or hide it for a rainy day, and not spend it.
You are not helpless, however. Considering how low mortgage rates are still – although they have risen over the last few weeks – I would suggest seeing if refinancing is right for you. But considering how long you’ve been in your home and the fact that you’re still working to pay off a mortgage, I’ll assume you were a little recently funded.
You don’t say what you did after you went to your local government to subdivide your land, but if it sits there, I would consider selling it. Because you have a mortgage, however, this will not necessarily be a simple process.
When land is subdivided, you must receive written consent from the lender or administrator of the mortgage under the property, said Tom Trott, an affiliate administrator with Embrace Home Loans in Maryland.
“This requirement is in most mortgages and standard language in the trust of Fannie Mae and Freddie Mac,” Trott said. To sell part of the property, you will need the permission of your lender. But if that’s hard to get, you still have options.
“Assuming they couldn’t get timely approval, then another option would be to realize the sale and refinance the remaining balance at the same time,” Trott said.