In chemistry, a catalyst is something that triggers a reaction — but the nature of the reaction itself depends on having the right elements in place to respond to the catalyst.
What brought to mind that tattered remnant of high school chemistry was thinking back on buying my first house.
I’ll explain how I got from home-buying to chemistry — and, in the process, hopefully share some pointers about what elements should be in place when you buy a home and what catalysts might trigger you to react to those elements.
The chemistry of home-buying
The reason I’m talking about home-buying in terms of chemistry is that there is more to buying a home than pure dollars and cents. Don’t get me wrong. The financials are important, and I’ve written a fair amount about some of the financial aspects of home-buying. However, what is equally important is your personal outlook.
Generally, the elements of your personal situation fall into place bit by bit over time, and you might not really notice how they are developing. It can take a catalyst to set everything in motion.
In my case, the catalyst was simple: Our landlord tried to raise our rent by $50. That doesn’t sound like much today; but at the time, it was 12.5 percent of the rent we were paying previously. More than that, it was a catalyst to us. We realized that renting meant being subject to that unpredictability every year when the lease term ended.
Once that catalyst sparked the idea of buying a home, all the right elements were in place for us to follow through on our decision. My career was progressing well, I had gotten married and we planned to have kids, and we had family roots in the area. If it hadn’t been for that catalyst, though, I’m not sure how long it would have taken for it to occur to us to buy a house. So, we have our landlord to thank.
Here’s how the chemistry of home-buying might come together for you.
How to know if it is time to buy a house
Here are some of the right elements for buying a home:
- Career stability. This does not necessarily mean that you plan on staying in the same job, but that you have in-demand skills and that there is a healthy job market for those skills within commuting distance of the house you plan to buy.
- Commitment to your area. It could come down to the weather, family and friends, arts and entertainment, or all of the above, but you need to figure out where you want to be for the long haul. It’s okay to be restless when you are young, but it is better if you aren’t that way after you buy a house.
- Clarity about your household. It might take several years before you start to have clarity on what your household will look like in the future: Will you marry? Do you expect to have kids? Will elderly parents come live with you at some point? The more clarity you have about the size of your household in the years ahead, the easier it is to know what kind of home to buy, though it is always wise to make choices that build in a little flexibility as well.
- Knowing yourself. Life plans and personal tastes take a while to evolve. Don’t rush into home-buying unless you have a good handle on what you want for the long term.
- Affordability. This is an entirely different area of discussion; but if the dollars and cents don’t add up, not all the elements for buying a home are in place.
Catalysts can help you decide
Given the right elements, what can trigger you to act on them? Here are some possibilities:
- A jump in rents. As I mentioned, that did it for us. It changes the current comparison between renting and owning costs, and makes you think about stabilizing your housing expense for the future.
- Low mortgage rates. You should look at today’s mortgage rates as an opportunity that might not always be there. If home-buying is in your future, you might want to accelerate the timing to take advantage.
- A change in household. Getting married or having a baby might mean you have to find a bigger place anyway, so you might think about doing that by buying.
- A strong raise in pay. A meaningful bump-up — beyond the standard annual cost-of-living type of adjustment — could not only give you the financial means to buy a home, but it might also be a sign that your career is well enough on track for you to make that kind of commitment.
In short, besides the math of affordability, buying a home comes down to the chemistry of your personal situation. Perhaps if we had known so much was riding on math and chemistry, we all would have paid more attention in high school.
Updated March 23, 2016 and originally published March 15, 2016.