Seems that there isn’t a day goes past that I am not asked about the concept of buying a house.  These questions usually come from younger workers who may be barely into their thirties.  And the answer I offer them is not what they want to hear.  In fact, it flies in the face of everything they have ever heard about home buying, much of it now like the retirements of our parents: not something we can count on for us.

So we usually begin with something so basic that it is almost considered a non-subject.

What is an investment?

For years I have focused on a what money can do over the long-term.  I have discussed stocks and bonds and 401(k)s and I have emphasized (repeatedly) that savings in not investing (savings is safe; investing involves risk)  But the idea of what an investment is still presents us with problems.

For instance, we often say we invest in our children. Why? Because we expect what we put in to come out at some other point better, improved, not prone to the same mistakes we have made.  We all know that we should invest in our futures but we can’t even see what the next week will bring.  And the biggest misconception of what an investment is turns out to be a house.

They ask, as if I am tearing down some pillar of knowledge they were genetically born knowing, assuming was correct: Are you saying that house isn’t an investment?

That is exactly what I am saying and you would think that, after we watched the housing crisis drive that point home, it would go without saying.  I bumped into a stat the other day that said 70% of the homeowners in Las Vegas were underwater on their mortgages. nationwide, 25% of mortgages are suffering the same fate with the borrowed money exceeding the worth of the home.  Another sobering statistic: it will take 60 years for the average underwater mortgage to recover to even.

The best way to put this: they are drowning in debt.  Even those with equity are drowning in debt.  How many times have you heard on one of those HGTV shows, as a young couple who wants more room, an office for him, three bathrooms, three bedrooms, room for their animals, plans for a family, tell the young buyers, almost off the cuff: “are you ready to sign your life away?”  And they say yes.

To which the people thinking about the concept of buying respond: But we all have to have someplace to live?

There  is the rub.  To be homeless is to be outdoors, to be without a house you are paying well over forty percent of your income on, each month, before taxes, insurance, upkeep and improvements is not even smart.  Yet we all think that this is what should be done.  Why? Because that’s the way our parents told us it should be done.  More importantly, it is what those folks who know how to invest told us it should be done.

This sort of talk coming from someone who is old enough to be their parent is disconcerting.  The look on their faces ask the next question: So what exactly are you saying?

Consider the fact that a two year old might think that Kindle is your book,  how text messaging was not even around just five years ago, how your missed phone call was recorded on a machine.  (Beyond that, I begin to date myself to a time when phones actually dialed.) We let technology advance in leaps and bounds but we still harbor the same “If I own a house I have arrived at adulthood?” concept of what we should do.

Roger Lowenstein, writing in the New York Times suggested we turn that whole concept on its head and walk away from those debts.  After all, it was the banks who got you into this mess.  They made money cheap, borrowing easy and now they want you to feel morally obligated to maintain the house you couldn’t afford in the first place.

For those who think they need a house, think again and again at how much it is going to cost you?  If you are upside down in your house, a term that refers to having a mortgage that is greater than you’re your house is worth, secure a good rental agreement prior to walking away.  And before you do, exhaust all of the channels with the lender.  And lastly keep in mind, it is more noble to have control of your money and rent than it is to have no money and house you can’t afford.

If you already own a home and are among those who are not underwater, chances are you are still looking to grow your family, which puts you in an interesting position. It is important to consider all of the options.

Perhaps you want to grow your family. Which sounds like a house big enough for two will turn into a small house and that will quickly be seen as a problem.

Even though interest rates are low and housing prices are well off their highs, your income is likely to be lower once you start that family.  Even if one of you doesn’t take off a significant amount of time, the cost of daycare will eat your income just as face as working less and staying home will.

Perhaps, I tell them, they should consider renting or continuing to do so. Buying a house, even with those economic considerations in mind, ties up too much cash (as I mentioned earlier: mortgage, insurance, upkeep, improvements) for too short of a period to be worth the effort or get you the return you desire. Add those costs up and I would be willing to wager you could get quite a lot of house to rent for less monthly. And you stay liquid during the lean years. It is well known that unless you remain in a house for ten-years, you will not see the tax advantages and not recoup the interest payments or closing costs. (Keep in mind, for this concept to work, you must be saving the difference between those costs of owning.)

In the end, most will buy.  In the long-run, they will, even if only in the back of their minds be reminded of the advice they asked for and then ignored.  I’m okay with that.  I bought my home at an usual time, when things were normal.  It was time when if housing prices were low it was because money was too expensive to borrow (my first mortgage was 14%, which 25 years hence is now 4.5%).  The opposite was high house prices and cheap money.

Those days are over.  Now it is low housing prices, cheap money and stringent lending requirements and rules.  And that is not likely to change in the near-term.

If you plan on walking away from your mortgage, you need to consider all of the options.  Approach the bank, attempt to find a buyer and before you miss a payment, secure some sort of rental agreement with a new landlord.  Just keep in mind, no matter what the bank tells you, no matter what the media or the politicians suggest, the weight of this economic recovery in not on your back.  When it comes to trouble like this, act as an agent concerned about your financial well-being; and no one but you.