I’m in my late 30s and have saved $2 million but I still rent – am I stuck forever?

Buying a home has become increasingly difficult in today’s market. Not only are housing prices elevated, but mortgage rates remain high.

There’s also a general shortage of homes on the market, which is making the situation harder for would-be buyers. A lack of inventory gives sellers the upper hand at a time when it’s so expensive to finance a home.

That’s why a lot of people are resigning themselves to never owning a home, including this Reddit poster. Here, we have someone in their late 30s who isn’t in a bad place financially at all. They have $2 million to their name, but they’re unable to buy a home because the housing market is, as they say, “ridiculous.”

The poster goes on to say that based on today’s mortgage rates, they’re looking at a very high monthly payment to own a home. And they don’t want to spend that much, even though they make a lot of money and can technically afford it.

The poster wants to know if they’ll be stuck renting forever. And the answer is not necessarily. But they should also know that renting long-term isn’t a terrible thing.

Why renting isn’t bad for your finances

Homeownership is often touted as a way to build wealth. And it’s true that owning a home can help your net worth increase over time, since homes have a tendency to gain value.

But you should also know that owning a home is a huge undertaking — both financially and logistically. And there’s also an opportunity cost to owning a home.

The money you spend putting down on a mortgage, paying a mortgage, and covering property taxes and maintenance is money you could be investing instead. And the time you spend dealing with homeownership tasks is time you could be spending working and earning money instead.

So you should not assume that renting a home forever is a poor financial decision. It could end up opening the door to a larger investment portfolio and a higher income.

Don’t assume market conditions won’t change

At this point, I would probably tell the poster here not to buy a home. It’s clear that they’re overwhelmed by the idea of having to take on such a large expense based on what the housing market looks like right now.

But it’s also important to note that housing market conditions could change for the better over time. Eventually, mortgage rates are likely to fall. That could drive an uptick in inventory that helps bring down home prices. So while the market may be “ridiculous,” as they say, today, it could improve in three, five, or seven years — or at another point in time.

For this reason, the poster, and anyone else in a similar boat, doesn’t have to assume that renting will be something they do forever. But if they don’t have a burning desire to own a home right now, then they might as well keep renting and wait until the time is right to buy.

It could also be a good idea to consult a financial advisor and get their input on the matter. A financial advisor might be able to show them why renting isn’t so terrible, and how it might actually improve their finances on a long-term basis.