Welcome to Money As If, a weekly newsletter where we alternately embrace, lament, lampoon, rethink, and reclaim our (forcibly) strange relationships with money.

In today’s edition:

• The trouble with homebuying in 2025

• Welcome to the White Lotus

• Pirate booty

— Jeanine

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IN THESE, OUR (POSSIBLE) END TIMES

Is homebuying canceled?

A still good (but not exactly guaranteed) bet

A key phrase here, though, is "some places." Housing markets are, after all, market-based.

Heather Kandawire, a realtor with Keller Williams Realty in Montclair, New Jersey — and the agent who represented my husband and me during our housing search — says home purchases in Northern New Jersey have proven to be a sound investment in recent years. 

"We are still seeing 15 to 20 offers on homes … with final prices going well over asking with great terms (on inspection, appraisal, closing time, strong lending, etc)," she says.

And, sure enough, the 1,192-square-foot house we bought for $430,000 in Verona, New Jersey, in 2017 and sold for $449,000 in early 2021 now has a Zestimate of $664,100 (Yes, I know, I know.) 

Even in California, where "insurance is definitely problematic," homeownership can be a "net wealth creator," says Scott Sheldon, a senior loan officer at SecurityNational Mortgage Company based in Santa Rosa, California. 

"I've seen people do exponentially well," he says." I'm still pro-homeownership. I probably always will be."

To buy or not to buy? That's a different question

It doesn't necessarily matter, however, whether property remains a good investment if you can't actually afford some. 

One of the reasons the northern New Jersey housing market remains hot is because New York tri-state area salaries have kept pace with increased home values (and prices), Kandawire says.

That's not true in all markets. Plus, you know, everywhere, there's inflation. And since, technically, the "rules" of homebuying haven't changed — a 20% down payment, a 36% debt-to-income ratio, total housing expenses no more than 28% of your monthly income — well, the economics can quickly get dicey.

As of Q4 2024, the median home price in the U.S. was $419,200, while the annual median income was $82,586 a year or around $6,882 a month. 

Assuming a 20% down payment and a 6.85% interest rate (the average on a 30-year-fixed rate mortgage at the end of that quarter), a buyer would be looking at a $2,591 monthly mortgage payment, which represents a whopping 37% of the median monthly income — and that's using the national average for monthly property tax and homeowners insurance. As we've already discussed, those numbers will be much higher in some zip codes. 

Compare that to Q4 2010, when average home prices were $224,300, monthly incomes were around $4,170, and it was much easier to net a monthly mortgage payment at or below the suggested 28% monthly spending level. 

^{Source: Freddie Mac, Federal Reserve Bank of St. Louis, U.S. Census Bureau, Bankrate}

"Right now, the math on buying a house is tough," says Jay Zigmont, certified financial planner (CFP®) and founder of Childfree Wealth. "There are many communities where renting is a better value."

So what does that all mean?

Homebuying isn't canceled, per se, but "today's market conditions — high prices, expensive mortgages, and climate-related risks — have made it a much more nuanced decision," says Melissa Murphy Pavone, founder at Mindful Financial Partners.

Location matters more than ever — and in ways it didn't previously. 

"Last month, my client needed an extra $100,000 in income to qualify for the same house their parents bought twenty years ago," says Wesley Kang, a Los Angeles realtor and founder of Realtor 1099 Cafe. "Not because of the mortgage but because insurance in fire-prone areas now costs as much as their property tax."

Plus, you still need to consider your credit score, debt levels, total household earnings, and, importantly, job security.

"It's not smart to buy a house if you're worried about your income," Sheldon says.

For your (emotional) considerations

Experts also caution against making a financially imprudent decision for emotional reasons, just not in the way I had presupposed.

"Owning a home is still deeply tied to the idea of stability and the American Dream," Pavone says, but "people need to weigh that against financial reality."

If a home purchase will keep you from other important financial goals (like saving for retirement or emergencies) or otherwise introduce undue stress into your life, it's smart to consider other options. If you can afford the purchase, plan to live in a buyer-friendly market, and have "owning a home" on your bucket list, it's smart to consider the investment.  

The decision is "a balance of lifestyle priorities vs. financial sustainability — and that equation is different for everyone," Pavone says.

In other words, do whatever you want and can, for whatever reason, financially and emotionally, you want and can do it. Ultimately, owning a home, like getting married, having kids, or quitting a job, is your choice and your business.

CHEAT SHEET

PRICE TAGS

White Lotus edition

Season 3 is airing now on HBO and Max.

🧘 $21,309.24

The total cost to spend the last week of February (and 2025 peak travel season) in an oceanfront villa at the Four Seasons Resort Koh Samui, Thailand, a.k.a. this season’s White Lotus. (Breakfast, and, presumably, sliced fruit, included.)

✈️ $2,198

The cheapest one-stop flight I could find out of New York City to Koh Samui Airport (USM), Thailand for the dates in question on Skyscanner.

💆 $282.15

The amount the Four Seasons Koh Samui spa charges for a 90-minute Lissant facial … which is, honestly, much less than I was expecting.

🧴 $80

The price of the Kiehl's Resort ReSet Collection, a White Lotus-themed collab that includes travel-sized body lotion, lip balm, and face stuff, “all thoughtfully packaged” in a special beach tote. Pair with a …

🛁 $84.95

… “one-size-fits-all” White Lotus plush bathrobe, sold by HBO Shop, and a …

🍫 $11.95

… bar of Thailand Mango Sticky Rice-flavored (and White Lotus-branded) chocolate from Compartés, an alternative if you, like me, can’t afford the real thing.

FRESH GREEN

Nowadays, most financial takes are boilerplate. These aren't.

• Learn how to stop “spaving” — that is, spending more to (maybe, but probably not) save a little, like on free shipping — and why.

• The three-to-six month emergency fund is dead. Long live the 12-to-18 month emergency fund. 

• Consider adding an “uncorrelated hedge” to your investment portfolio, like gold, ETFs, futures, fine art, luxury watches, or, umm, cryptocurrencies.

THIRST TRAP

And, finally, today, in things I would buy if, you know, I could just buy things ….

Pirate John

A centerpiece of Treasure Island, Van Cleef & Arpels’ newest high-jewelry collection. A white-gold, rose-gold, and yellow-gold brooch, encrusted with sapphires, rubies, and diamonds. Price so high they don’t even disclose it. But, oh, I think he’s so pretty.  

Got comments, questions, tips, receipts, thirst traps, etc. you’d like to share? Send them to [email protected].