Should I buy a house or invest in the stock market?

I am 28 years old, single, and make $90,000 annually. I have $70,000 in my savings account and I don't have any loans. I am planning to get married and have a family in the next two years, so I was thinking to buy a house and prepare for my family. However, this time of year, the interest is high and house prices are also high in the Washington, DC metro area, where I live.

Should I invest all my money in the stock market and start to save for a down payment for next year? If I do, will house prices be higher next year?

Financial Planning, Investing, Real Estate, Stocks
Answers
Sort By:
Most Helpful
4 weeks ago

It sounds like you are an aggressive saver if you feel as though you could save another $70,000 over the next two years if you put "all" your money in the stock market now. This does not need to be an either/or decision. I suggest continuing to save for a home and begin to invest. Both have risk, but there is risk in doing nothing as well, opportunity risk and inflation risk. You don't mention where you are in your relationship and whether your future spouse would participate in the selection of a home at this time. I strongly suggest that be the case. And as you further develop your long range plans, you may find that your needs and/or preferences are different from what you now think. It would not be prudent to buy now, then sell in two years because the house or location is no longer desirable, for whatever reason.

I would say, invest half and continue to save, dividing savings between house fund and investments until you are ready to begin your new married life and do it together. The fact that you are willing to literally start over with the house fund tells me you are not really there yet and maybe feeling pressure regarding what you "should" do or overly influenced by local economics. Also, put yourself in your future spouse's position of prospectively being told something like, "I just bought this place and can't sell it so soon. This is where you will live."

5 weeks ago
4 weeks ago
4 weeks ago
4 weeks ago