Help Us Decide: Should We Buy Our 'Forever Home' or Opt for a Stepping-Stone?

My wife (29F) and I (28M) are in the midst of an existential crisis when it comes to buying our next home. We have about $350k in cash (including equity from our current house) and a combined income of ~$400k/year (mostly from sales, so it’s fluctuating). We’re feeling pretty solid in our careers, but let’s be honest: we’re both young, and the uncertainty that comes with sales jobs means we don’t have everything figured out yet.

Here’s where we’re at: We’ve always dreamed of buying our ‘forever home,’ but with home prices where they are and the market being what it is, we’re wondering if now is the right time to go all in. The house we’re eyeing was built just 3 years ago for 40% less than what it’s priced at now due to inflation and rising construction costs—and that’s giving us major pause. What happens if we stretch ourselves too thin and something goes wrong in the next 3-5 years?

On the other hand, we could go for a stepping-stone house and ride out the current market (low inventory, high prices). We’ve narrowed it down to two options:

  • Option 1: 4000 sq ft custom new build, unfinished basement (adds 1400 sq ft), Price: $1.5M

  • Option 2: 4800 sq ft with a finished basement, production build, new but not custom, Price: $750k

We’re torn. What do you think? Should we go big now and lock in our forever home, or is it smarter to wait, get something more modest, and play it safe? If we go with Option 2, will we be in the same situation 5 years from now, wishing we just went all-in on our forever home earlier? Anyone been in a similar position, especially with a sales job, and could offer some advice?

I’m in a similar situation, but have made my decision to flex into the forever home. How stable are your careers? Are you in love with the area? The cost and effort to move just goes up over time, and you can always refinance down the road. But you have to have reasonable confidence in your salary staying consistent.

We’d like to think we will be at least the same if not more from an income perspective in the next 5-10 years. We are in love with the area, the lot, and the neighborhood for option A. Very true on cost and effort, especially with a growing family. Also true on refinancing option - good points!

My opinion: an easily affordable mortgage (or no mortgage at all) is a rare luxury and leads to true wealth earlier. You’ll feel less stressed about eating out, going on vacations, expenses for your kids, maxing your retirement accounts, etc. And god forbid if you ever have a life-altering injury or substantial loss of income, you will more likely be able to keep your home and still provide for your family.

“Forever Home” is a lie we tell ourselves to justify spending money recklessly. Get serious about your budget and then decide what the options are…limiting yourself to these two options isn’t an honest exercise.

Forever home = what we are comfortable with at the top of our budget. Stepping stone = what we are comfortable with from a space perspective to get by for 5 years. We feel the options in between are non-committal/non-intentional from a spending perspective.

4800 s.f. is only comfortable from a space perspective to ‘get by’ for 5 years? You’re lying to yourself (and us) to justify spending money recklessly.

For the most part, yes, 4800 sq ft (including finished basement) is, for us, the space we’d be comfortable with to have 3-4 kids, plus two WFH careers and a room for out-of-state in-laws for the next 5 years.

I’d get the Stepping Stone. Y’all are young (as am I), and sales income can fall off a cliff in hard times. There’ll be plenty of time to get your Forever Home later.

Do you have kids? Do you plan to have kids? What’s the school district like? How is your emergency fund? How is your retirement savings? How is your net worth? Can you swing house A/B on one income? Are you capped at that income or expect to increase future earnings? Too many questions that first need to be answered.

1 kid, plan to have at least 2 more. Both options are in the same school district (best in the area). Emergency fund comfortable either way. Only other debts are x2 car payments ($1k/m). Retirement savings adequately contributed to via 401k/managed brokerage. Can swing house B on one income; house A would not be achievable on one income for likely 5-10 years.

I’m torn, because I can make an argument for both. However, having been in the same position, I opted for the forever home. One thing I will say is you never know what tomorrow brings, but if you can make your dream happen, don’t let anything get in the way of making it happen.

Thanks for the kind words! I do agree that the nice part of sales is being able to put the foot on the gas, and that going the forever home route will be a motivator to be more successful as a whole.

We bought our ‘starter home’ and wound up staying there for 15 years. I’d opt for your forever home today if you can do it, because it’s definitely going to be more expensive in the future.