u/FIREseek

My partner and I are getting married this September, and we’re trying to figure out whether buying a house in the next few years makes sense or whether we’re better off continuing to rent and invest.

We currently live in the DC metro area (Maryland) in a neighborhood we absolutely love. It’s highly walkable, has great Metro access, and makes commuting into DC easy. We currently pay about $4,200/month in rent and spend another $2,000-$3,000/month on everything else (groceries, dining, travel, entertainment, etc.).

The challenge is that homes in the areas we’d actually want to live long term are expensive. Depending on the neighborhood and size, prices generally range from about $1.5M to well north of $3M.

On paper, it seems like we could afford a home at the lower end of that range. I make roughly $400k per year in total compensation and my fiancée makes about $160k, putting our current household income around $560k. We both expect our incomes to continue growing and could realistically see household income approaching $700k within the next several years.

That said, even if we technically qualify for a $1.5M-$1.7M home, I’m concerned we’d feel house poor. We’d likely have less flexibility to travel, invest aggressively, and maintain our current lifestyle. Kids are likely in our future as well, which adds another layer of uncertainty.

What I’m struggling with is the opportunity cost. Every dollar going toward a larger down payment or higher monthly housing costs is a dollar that’s not compounding in the market.

Here are the options as I see them:

Option 1: Buy now in the area we love
Likely a $1.5M-$1.7M home
Stay in the neighborhood and lifestyle we enjoy
Higher monthly housing costs and larger down payment
Less capital available for investing
Hope future income growth makes the housing costs feel more manageable over time

Option 2: Buy farther out
Lower purchase price and monthly payment
More room to continue investing aggressively
Longer commute and less desirable location
Potential risk that we’d eventually want to move back closer anyway

Option 3: Continue renting and save for the house we actually want
Stay in the area we love today
Continue investing and building a larger down payment
Wait until we’re more certain about children and long-term space needs
Potentially put ourselves in a stronger financial position to buy in our preferred neighborhood later
Risk that home prices and interest rates continue to rise, making that future purchase more expensive

For context, here’s our current financial picture:

My assets
$712k taxable brokerage account (primarily low-cost index funds)
$408k retirement accounts
$45k in USFR
$18k HYSA
$98k cash
$20k cash in brokerage
$3k HSA

Partners assets
Approximately $130k across brokerage, HYSA, and cash

Combined net worth is roughly $1.4M.

We currently invest approximately:

Me: ~$116k/year
Fiancée: ~$32k/year

Combined annual investing is about $148k, and typically ends up closer to $170k after bonuses and additional contributions.

Part of me wonders whether buying a house right now is solving a problem we don’t actually have yet. We don’t have children today, we’re happy in our current rental, and we’re able to save and invest a significant amount each year.

Another part of me worries that if we wait too long, we’ll get priced out of the neighborhoods where we’d ideally want to raise a family.

Curious how others would think about this situation. If you were in our shoes, would you:

Buy now and stretch a bit for the location you want?
Buy farther out and keep investing more aggressively?
Continue renting, investing, and saving until you’re more certain about your long-term needs?

Also open to any thoughts on our cash allocation. I feel like I’m sitting on more cash than necessary, but I’m hesitant to deploy it if a home purchase may be on the horizon within the next few years.