Why you shouldn’t buy a house if you want to build wealth, according to a


  • Many people dream of owning a home, but financial planner Nicole Morong believes homeownership is overhyped.
  • Homeownership can come with hidden costs. The money you save while renting might be better in the stock market.
  • Morong encourages people to ask what their true motivations are behind buying a home.

For many, buying a home is a part of the American Dream. Homeownership represents stability, security, and financial success, even though many millennials feel like they’ll never reach that milestone.

However, financial planner Nicole Morong of Peterkin Financial says buying a home isn’t all that it’s cracked up to be. She tells Insider, “Buying a house is not always a good idea.”

Regardless of fluctuating home values during a possible upcoming recession, she argues that the hype around buying a home may not actually be about providing people with housing stability. 

Morong says, “When you look at closing costs and front-loaded interest on mortgages, you see how it’s a humongous revenue source for different municipalities and banks. There’s real estate agents, and attorneys, and a lot of different professionals that touch that one transaction of buying a house.” 

She adds, “I think there’s kind of a racket around homeownership because of all the emotional stuff. People kind of just go along with it. Everyone makes you feel like a loser if you don’t buy.”

Hidden costs of homeownership eat into any profit you might make when you sell

In her experience of helping hundreds of clients with financial planning and investing, Morong says that buying a home and selling it for a profit a few years later is actually one of the least profitable investments she’s witnessed. “Buying and selling a house is really expensive. It comes with all these hidden costs,” she says.

According to Morong, hidden costs of buying a home include:

  • Homeowners association fees
  • Closing costs
  • Maintenance fees

On top of that, Morong points out that the road to homeownership is a long one that involves improving your credit, saving for a


down payment

, and paying down debts. 

On the flip side, she says the hidden costs of selling a home include:

  • Realtor fees
  • Staging the home
  • Upgrades or renovations needed to sell the home

Morong says, “Some people thought they were making $300,000 [from the sale of their home], but when we crunched the numbers, based on how much they paid on the ancillary costs related to homeownership, they only walked away with $30,000.”

Morong says your money might work harder in the stock market instead of real estate

“Every market is a good market to buy for somebody, right?” she says. In the example she provided of a client only walking away with $30,000 in profits from investing in a home, Morong says, “They could have invested that money they spent over the last 10 years instead. They might have walked away with more than $30,000.”

She gives another hypothetical example: “Let’s say, for example, someone lives in Boston and is renting an apartment for $4,000 a month. Some people might say, ‘Oh, you could buy for $4,000!’ But they would have to go 20 to 30 minutes outside of their desired neighborhood, and after HOA fees and all of that, they end up paying $7,500 a month. They’re better off paying $4,000, then investing the difference in the market.”

Morong rents an apartment in San Diego, though she owns an investment property as well. She says, “I bought my first house when I was in my early 20s, and it was an investment property. It worked out for me, but I’m renting now intentionally because where I want to live, the prices are insane. It’s better financially to invest that money [that I’m saving from renting] than to buy a house.”

Examine your motivations…



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