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I'm personally glad we bought when we did (still no kids and have since moved to lower cost of living), but we were earning $80k when we bought our first house for $220k. If we'd been TTC at that time with your house prices, I wouldn't have been comfortable buying personally.

I'm mostly glad we bought, but I don't think it was essential before TTC by any means. Both housing costs and mortgage rates have gone up a fair bit here since we bought, so I'm mainly relieved that we "locked in" when we did...but in the shorter term, renting might have made a lot of sense. If we hadn't been able to put 20% down and if I hadn't been expecting some pretty significant bumps in pay (which have fortunately come through), I don't think we'd have taken the plunge.

I'm glad we bought because I'm glad we have the space and feel settled. That said, we would have NOT bought without having at least 20% to put down. We're not comfortable spending more money on PMI, and are of the mindset that we can't really afford a house unless we can put 20% down.

We still live in an apartment (2br now, but 1 when LO was born). LO is almost 3yo. It's doable, and even pleasant. we have a pool, a maintenance crew, and cash reserves.

On the facts you've given, I would not get a mortgage. As a purely economic matter, renting is a far better deal, even given equity, inflation, possible big rise in house prices (unlikely, imo), rise in interest rates, etc., if rent is that much cheaper than a mortgage + ins + taxes + maintenance + interest.

The answer is always buy a house. You'll be so much more financially secure in the future if you do. The sooner you can do it the better.

I'm glad we bought when we did. Our cost of living is fairly low here, and we were able to keep our mortgage payment in line with what we had been paying in rent. If that wasn't the case, I would be fine with renting and having children. Finding a good landlord is key though, it really makes everything much smoother.

We briefly considered buying when we needed to move after I got pregnant but ultimately renting still made more sense. We wanted to stay in the city and not add a really long commute to DH's day, which means a very expensive and very competitive buying market around here. You could literally buy a mansion in many parts of the country for what a 2 bed condo would cost! So we moved to a bigger apartment rental and are totally happy-- the jets in our tub are broken and guess what-- the landlord is sending a plumber, not us.

So it totally depends on your situation but I think there are lots of times when renting makes more sense. Also, I didn't want to get stuck stretching ourselves a little thin financially right before having the baby, with all the unforeseen or unknown expenses that come with that.

@pui: I don't think this is always the case. If your income doesn't support the mortgage, no bank is going to approve you.

In some instances, people are better off renting, especially when you factor in taxes and insurance.

@pui: I think it really really depends where you live.

OP, Can I ask why you want to buy a house right now? It sounds like renting would be the smarter financial decision right now (maybe for a while).

@hilsy85: I mean maybe if you or your husband have a job where you will be moving around a lot. Or maybe if property values in your area are really low and will likely never go up. There are very few cases where buying a house as soon as you possibly can is not a good financial decision.

@pui: We'll have to agree to disagree. I just returned from a country where home ownership is very low, largely because of the belief that a long term debt, like a mortgage, is a huge financial risk.

I don't think homeownership is all it is cracked up to be. It can be financially draining, especially if you are not careful of what you are buying and where you are buying it.

@looch: @hilsy85: What other investment increases in value over 10 years by 79% and you can leverage only 10% of the principal investment in a mortgage? And then when you sell, pay no capital gains? Plus, it's an investment that is actually useful to you in the meantime, a place to live! When you think longer than 5 years in the future, it's no contest. Your first house is the smartest investment you will ever make.

I guess we will just have to agree to disagree.

This is a tough one for me. We currently rent (month to month in a GREAT townhouse with laundry) and we've lived here since before our 3.5 year old was born. We now have 2 kids in this place, and have been paying for full time daycare since he was 18 months. Now we're facing double daycare starting in the fall. And we're looking to buy, as well.

We've decided that unless we can find a RIDICULOUS deal on a house that we just can't pass up, we're going to stay put in our affordable rental for the next 2 years while we're paying double daycare. During which time we'll work to pay down our debt and do all kinds of things with our finances to put us in a good position to purchase. Then after we go back down to single daycare (when our older one will be in elementary school) we'll start looking to purchase our "dream" home then. (We also live in a very high cost area, so the dream home actually means dream for the next 10ish years if you're not a billionaire.)

So my advice based on my current situation would be to continue to rent... BUT there are two big differences between me and you: I'm facing double daycare in a few months, and I've got more debt than you. (school debt, personal debt, car payment.)

Since your current roadblock (daycare) isn't immediate, and even if you are pregnant within a few months, you'd still have almost a year to figure out daycare, I would say go ahead and attempt to purchase. That way your expenses (including your mortgage) are set, and you can budget your daycare accordingly once the time comes. And at this point, you're not even sure if daycare will be an expense or not. I say settle down and fix your budget to a place where you are more than comfortable now, and then when it's time to start looking at daycares, you can adjust your budget then. Trust me, once the time comes, you will find that pinching pennies to afford daycare is difficult, but all a part of life. When we took on daycare payments, I went back to work almost full time at a much higher pay rate than I was making before, Wagon Sr. got a promotion and a raise, and we cut way back on all of our expenses.

I would also try and save towards that down payment as much as possible right now. If you can avoid PMI by putting down 20%, that will save you a couple hundred a month in your monthly payments. But also, if you can put down as close to 20% as possible, once you are paying towards your principal and you hit 20%, PMI disappears. This is new! Just found out from our mortgage broker. So even if you can't get to that magical 20%, getting close will totally be worth it, if you can rid yourself of PMI before daycare hits.

Also, very smart to set aside 10k for closing costs I was going to say that's kind of a lot, but if you take fix-up costs and things you need once you move in, that is probably a perfect amount!

@hilsy85: that calculator is awesome!!

@lokki: I think it depends on when you would buy if you held off until after baby. If it's either buy now or buy in a year with an infant, I would probably buy now. But if it's either buy now or buy in 5 years, I can see where it might be better to wait. Buying a house is seriously the most stressful thing I've ever been through. I can't imagine doing it with a new baby (not to mention you acquire so much baby gear and that just adds to the stress of having to move). I am SO glad we bought a house before having a baby.

@Mrs. Jacks: It kills me to leave these great interest rates behind. That's why we were so intent on buying asap. But with the market the way it is in our area, it's just smarter to wait and hope the rates stay somewhat low. Byebye, lovely low rates...

I bought a house before I met DH. I could support the mortgage on just my income so it isn't difficult to pay the mortgage and pay for daycare.

Do you have an emergency fund for at least 3-6 months of expenses? If not, you should not buy. Houses are expensive, and repairs/maintenance expenses will creep up.

Based on the information you listed, I think you should rent. Renting is cheaper than owning in your area (that is based on your math that is not including home repairs/maintenance which is quite costly). Additionally, you don't have 20% for a down payment, so you will likely be paying PMI, which is another expense you may or may not have factored.

I think its very optimistic to assume your husband can work full time, but only have LO in part time child care. This might work for a short time when LO is an infant, but once he/she is mobile, you will need more child care if your husband is going to work full time.

Our daughter is 5 months old, and we've just started looking for our first place. We've been very unhappy with renting, and can't wait to get in a place of our own. We don't have 20% to put down, but from all of our research it seems like buying is a much smarter option. In this area, though, rent is MUCH more than mortgage payments. With the low interest rates and the rising housing market, now is a great time to buy. Do you think you could find a slightly smaller house or a foreclosure? Buying a house that needs just a little cosmetic work is a good way to get a larger house for less money!

@mrs. wagon: we were really luck to capture 3.1%. But that was so last year now. Friends that are trying to buy right now are looking at 4.25%. Still great, but not as great.