We love the house we rent, but my husband and I are in our thirties and are starting to feel like we “should” buy. But, renting our current place makes us happy — we love our neighbors, we love our easy walk to the downtown area of our city, and we love the coffee shop around the corner. We worry that if we move, our budget will mean we’ll have to move further from downtown, so we would end up with longer commutes and a less walkable neighborhood. Should we keep renting, or buckle down and buy a place?
— Are We Renting Our Happiness?
Dear Are We Renting Our Happiness,
You’re totally right: Buying is usually seen as the next step toward adulthood, and what we “should” do as a marker of success. And if your finances are in the right place, it’s true that buying can be a smart decision since you would have equity in your home, wouldn’t be at the mercy of rent hikes, and could diversify your assets. A financial planner can give you more detailed intel on the potential financial upside of this decision. But you asked about the happiness element — and the answer isn’t necessarily clear-cut. Here, what we know:
Buying isn’t the ticket to happiness
Financial security aside — and it is important — buying a dream home can come with a few downsides you may not envision when you sign the papers. A German study once tracked homeowners after they bought their houses. These study participants were moving from homes that clearly had negative qualities. When people moved, their happiness with their homes increased. The catch? Satisfaction with their lives overall stayed about the same. In other words: Buying a house can fix some immediate problems. But will it make you happier? Probably not.
The average Tuesday night matters
It’s important to think about what makes you happy in your home right now. You say you love the walkability, the community, and the coffee place. So make those items a priority on your house hunt, if you do decide to buy. When it comes to happiness, it may make sense to prioritize location over space and only look at places that fill the criteria that are important to you.
One way to assess happiness is to imagine your life on a random Tuesday night, both the way it is now and the way you want it to be in your new place. What do you envision? Do you picture grilling in a backyard with neighbors? Then it may make sense to look into close-knit communities or condos with shared patios. It’s also important to consider what you don’t want on a Tuesday night. Say you find an amazing house that’s about an hour commute away from your job. You may imagine idyllic grilling and chilling, but what you may also get is ninety minutes in an aggravating commute. Taking in these perspectives — the upsides and the downsides — can help you decide on the best home.
Remember: We’re adaptable
It can be comforting to remember that usually, we adapt to the status quo even after a major life change like moving. But we often over-project: We assume life will be perfect if we live in that house, or that city. Remembering that a house in itself is exciting and novel, but not necessarily life-changing, can help you choose one that makes sense for your budget and your lifestyle.
So, bottom line: I can’t say whether you “should” buy a house. That depends on your financial needs, your goals, and your expectations. But I can tell you that buying a house likely won’t make you happier than you already are, and paying attention to the sources of happiness you have now can help you choose the best path for you. Is it “wrong” to want to keep renting? No. Understanding that happiness can’t be bought — even with a house — is a great perspective to have, and can help you find joy, even with a mortgage.
Elizabeth Dunn, Ph.D., is a professor in the Department of Psychology at the University of British Columbia who researches how time, money, and technology shape human happiness. She is also the scientific advisor for Happy Money, a financial company that combines psychology and money to help people live happier lives. Have a question for Liz? Write to her at firstname.lastname@example.org and check back every Wednesday for her next column.