You’d think that someone so heavily involved in the mortgage world would have a family full of homeowners, but that’s not the case with David Stevens.
Despite being the president and CEO of the Mortgage Bankers Association (MBA), and formerly the FHA Commissioner, his 27-year old daughter still rents her place, per Businessweek.
Sara Stevens is reportedly well aware of the favorable situation in housing at the moment, what with the near-record low mortgage rates, the increasing rents, and the ability to grow wealth through home equity.
But that’s not enough for her and fiancé to give up their 765-square-foot one bedroom apartment in Arlington, Virginia, which runs at a hefty $2,195 a month.
Sure, they’ve got some student loan debt, like most Millennials their age, but pops has already pledged to help her with the down payment if need be.
And with combined income of nearly $108,000, the couple could most likely afford to purchase a fairly nice home or condo, even with home prices in the D.C. area pretty steep.
The apparent issue is that they’re currently in a central location, close to a subway stop and within walking distance to popular bars and restaurants.
If they decide to buy, they’d likely need to forego those perks for a longer commute and a home/condo that isn’t as nice as their current digs.
Is She Like Any Other Person, or Is Dad Telling Her to Hold Off?
On the one hand, it appears as if Sara Stevens has seen a lot of ugly stuff during the latest housing boom and bust, which would clearly make her a lot more cautious about purchasing a property.
Ditto anyone else thnking about getting into real estate today.
She apparently had family go through “tough situations” with bad mortgages that her father tried to sort out over the past few years.
But at the same time you have to wonder if she’s just like any other young adult, wanting to live in an urban center and enjoy the relatively stress-free life renting affords.
Because at the end of the day, it’s a lot easier to rent than own a home. You don’t really have to worry about the place. You make your rent payment each month and if something goes wrong, you call the landlord. It’s their problem, not yours.
The downside to renting is that you miss out on potential home price appreciation, and forced savings via home equity building, but with what has gone on over the past decade, that’s no longer a guarantee.
Interestingly, Sara’s dad purchased a home in Denver back in 1984 at the age of 27 when 30-year fixed mortgage rates stood at 13.9%. Today, they’re closer to 4%, yet Sara is holding off. Does dad know something we don’t know, or is it purely her decision?
Now of course everyone has their own reason for buying or renting, but it does kind of speak volumes about the very strange housing market these days.
Interest rates are ridiculously low, home prices are still well off recent record highs, and rents are climbing, yet everyone seems really cautious about diving in.
But maybe that’s a good thing, because the moment everyone gets euphoric about housing again, we’re in big trouble. So I, for one, welcome the uncertainty.