Buying a house is incredibly difficult for me. Here’s why.

As a young person in DC paying what feels like a ridiculous amount in rent, I wonder about buying my own place. With these crazy prices, wouldn’t it be worth just making the jump to ownership?

Well… no. When it comes down to it, buying a home of any size in DC is just not possible for me. And I’m not alone.

I shared my struggle with our contributors, and many submitted their own opinions on and experiences with the matter. There are so many barriers to home ownership in this area. Fundamentally, the finances of buying have changed, as have the financial realities for many would-be home buyers like myself.

Down payments are a pay wall

One reason I’ve been scared to even consider owning is because of the down payment required on homes as expensive as the ones in this region; it’s magnitudes greater than the security deposit I typically have to put down as a renter. My fear isn’t unique.

Arlen, a commenter on our site, said:

I’m a renter with a solid income who would love to own a home. The down payment is what stops me. It’s going to take a long, long time to save up 20% of the price of a $500,000+ home. It’s especially hard to do when paying rent on a place large enough for a family with kids and then paying for child care for those kids.

Of course, I could take out a loan for that up front cash, and interests rates are low right now. But in our region in particular, taking out this loan is more complicated and more risky. Gray Kimbrough said:

A lot of DC-area housing necessitates a jumbo loan (for mortgage value over $417,000), raising the down payment requirement from 10 percent to 20 percent. Down payments have to be much larger because the cost of housing is up so much. In my downtown Silver Spring neighborhood, houses were going for $200,000-$300,000 not long ago, so buyers needed down payments of $20,000-$30,000. Now those same houses are $500,000 or $600,000, needing a down payment over $100,000 for a conventional mortgage.

These jumbo loans also have more stringent requirements for approval, and restrictions on how much interest I can deduct from my taxes. There are loans backed by the federal government that can help in particular with the down payment problem (Federal Housing Authority, or FHA, loans).

But as Gray pointed out, “FHA fees have been increased dramatically, making this a much less attractive option.”

More debt? You’ve got to be kidding me

For me, taking out a loan to pay such a big down payment makes for a frightening amount of debt. Sure I could try to save up, but savings don’t build quickly when I’m paying these high rents.

What is more, myself and many others are already suffocating from student loan debt. In fact, we are suffering from some of the highest amounts of student debt in history.

I personally am not interested in adding to that mountain of bills. Neither is Aimee Custis:

I’ve been watching many of my friends buy condos or houses, but others among us (myself included, even with a decently-salaried nonprofit job and a successful side gig) simply can’t even fathom that jump. The number one thing that sets me back is my student loans.

Dan Reed added his take:

You can definitely see the ripple effects of the student loan burden in the housing market today. Condos that might otherwise attract first-time buyers are already harder to finance today after the Great Recession. But lenders and builders know they’ll still have a smaller pool of buyers anyway, hence the glut of new rental apartments that are being built.

Beyond all that, it’s been harder to buy a house since 2008’s financial crisis

Before 2008, it was arguably much too easy to buy a home, and many people were exploited and took on bad loans.

Things have changed. It’s probably good that people looking to buy homes face more scrutiny, but that also limits some groups of prospective buyers.

“Credit requirements have definitely gone way up since the early-2000s boom,” said Gray. “This is particularly bad for people with limited credit history or who are self-employed.”

“I’ve been self employed almost my entire career,” said Julie Lawson, “and getting a mortgage is incredibly difficult due to variable income and verification requirements.”

Charlie, a commenter, agreed: “We’ve tightened lending requirements. Good luck trying to get a mortgage if you are self-employed… Easy to get a car loan or credit card though.”

In many ways, our financial system has simply shifted. It still favors home ownership in many ways (some less equitable than others), but does not encourage it like in the past.

As kob, another commenter, points out:

Banks no longer want home ownership. There’s more money to be made in rental investing. Apartment complexes, and single family homes, are being bought up by investment groups for rental. By raising lending and credit requirements to unreasonable levels, people seeking to buy are punished.

So where does this leave me?

For now, I’ll remain a renter. And honestly, I don’t feel like I have too much of a choice.

What has impacted your decisions about renting or buying?