Buying a House

A few months ago, we decided that we would look into buying a house and staying in the Boston area for a while. We have both been stressed out by the uncertainly of where we would be living a few years down the road and are tired of throwing away money on rent each month. Ultimately, we would like to be back on the west coast to be closer to family, but we had a good long talk at dinner one night and decided that we were comfortable staying in the Boston area for the next 3-5 years and Kristen could easily find a post-doc or industry position in the area.

With Kristen's mom's help, we looked into buying a house in the Boston area and have decided that it really doesn't make financial sense for us. There were a few key issues that are keeping us from buying:

1. Housing in the Boston metro area is still very expensive. There really are not a lot of places that are: a) close to Cambridge, b) close to Bedford and c) Under $400,000.
   
2. The volatility of the market over a 3-5 year period can swing it from being a really good idea to buy to a really bad idea. To break even with rent, we would have to make about 3% a year on a $300,000 place. Breaking even on a more expensive place requires larger gains each year.
   
3. We don't have a large down payment right now. What we do have would wipe out our savings and emergency money. If I lost my job, we would immediately lose the house.

I think we are comfortable with the decision not to buy. We feel a lot better now that we've gone through the decision making process. Its still frustrating to be throwing money away on rent, but we are very focused on saving money for a down payment in 3-5 years. Our budget for this next year is structured as if we were making mortgage payments each month with the difference between what we have budgeted and what we are spending going directly into a housing fund.