Is the Financial Strain of Homeownership Worth it?

10/26/2012 05:30 EDT | Updated 12/26/2012 05:12 EST

Why do we buy things? I think broadly speaking it's for one of two reasons:

• We buy things because we need them.

• We buy things because we want them.

There are things in life that are required, like food to eat and clothes to wear and basic toiletries to keep us at least somewhat sanitary. And there are things we desire, like plasma TVs and nice cars (and better food, designer clothes and more expensive toiletries) -- things that make us happy to have them.

Of course, the best things bought are the ones that serve both purposes, when what we need and what we want are the same thing. I can't think of a lot of times that actually happens, but I would argue buying a house is one of them. It is the confluence of humankind's basic requirement of shelter and one of our greatest aspirations -- to own our own little piece of the world for ourselves. There may be bigger existential decisions to be made in life, like marriage and your career path, but there is no more important purchase you will ever make. Nothing will even come close.

Buying a home marks the true end of youthhood. You're ready to put down roots now, to establish yourself, to mark your territory. Maybe build a family. And what you've come to realize is that, in life, you need love and friendship (and some money), and after that you need a place to come home to that's yours and no one else's. A place that is comfortable, safe and hopefully happy, and also a place that by virtue of its cost and size alone proves you're actually making something out of yourself. It makes all the insipid, scarring, pointless things we have to do to get by more palatable because the reward for doing those things is you get to live in your house. If you were still young, you'd probably be too dumb and idealistic to realize this.

But have you seen what a modest house in a barely decent neighbourhood anywhere even remotely near a metropolitan area costs these days? It's kind of ridiculous. There is no way you have anywhere near that much money, which means you have to borrow, a lot, from the bank. Sure, people say prices are inflated, that the bursting of the bubble is imminent. You could wait. But, then again, they've been saying that for a while now and the bubble hasn't burst yet, which make you wonder if it ever will -- whether current housing prices really are disproportionate or they're just getting less affordable because, generally speaking, everything is getting less affordable.

I'm not here to excuse homebuyers who have trouble paying their mortgages, and the 72 per cent of respondents to a new BMO survey who say even a small increase in lending rates would put them in a serious financial hole. But I think I can at least explain their thinking -- what exactly it is a house gives them that makes it worth the financial burden. The point is that while buying a house -- or condo -- is quite clearly a momentous financial exercise, it is very much an emotional one, too -- I would argue more so.

And besides is it really irresponsible to buy a $750K McMansion you can barely, or can't exactly, afford? I don't know. I mean, even the most fiscally prudent of homeowners are but a prolonged illness, job loss in a crap job market or string of bad investments away from feeling the strain. In other words, because life is filled with uncertainty, signing on the dotted line to pay this much money for anything is always going to be a risky proposition. The difference between the supposedly secure homeowner and the barely surviving one is a matter of degree, not principle -- in reality, most of us can't be completely sure we'll be able to pay back all that money. At some point, you just have to take the plunge and hope it works out.

I'm aware I've painted an overly romantic portrait of homeownership. And I acknowledged for some people buying a house isn't that at all -- it's just something to do because other people are doing it, or a bank told them they could. But I'd like to think a good many homeowners recognize buying a home is the most meaningful purchase (superseded only by an engagement ring) they are likely to ever make, and so it is a decision not to be made lightly. It's risky and terrifying, it's a massive leap, but then again I think we come to know that's what most good things in life -- and all the best ones -- are.

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