A lot of people are likely asking this question. The current interest rates are at their lowest in decades. The housing market appears to be bottoming out. The latest S&P/Case-Shiller reports indicate that home prices has gone down nationally by 33% from its highs during the bubble. It’s a buyer’s market and a good buying opportunity if you have the resources.
Prior to having our son, my husband and I discussed possibly retiring in our current home. We agreed that we will consider moving to a better area if we have kids. We currently live in a modest neighborhood that is relatively safe with the elementary school only a block away. However, the school is not exceptional. The test scores and school performance are lacking. I would like for our son to attend a much better school.
We like our house. It has fruit trees we enjoy. The layout and size are perfect for our lifestyle. Something that we cannot take with us. Being our first home, it also has a lot of sentimental value. More importantly, our mortgage and property tax is relatively low since we bought it prior to the real estate bubble. We are also on track to pay it off in several years. Paying off our mortgage would realize our dream of living totally debt free.
On the other hand, if we buy a new house, we can rent the current one. This can be a good passive income stream and someone else can pay for the mortgage. The down side are the risks of renting. There are plenty of horror stories on rental properties.
– Better neighborhood and school
– Low mortgage interest rates
– Possible good value on housing
– Increase in debt
– Higher property taxes
– Will take longer for us to be debt free
This is a bit of a tricky situation. The upside of moving to a better neighborhood needs to outweight the financial compromises. Our son is only 17 months old so we have a bit of time to decide before he starts school. Are you on the same boat? What would you do? What is more important to you?