The Advantage to Buying, Even in this Aggressive Market: One Buyer’s Scenario

I would like present a scenario I recently heard about for a 1st-time Homebuyer (aka a Renter). Fast-rising rents have many people seeking the protection that a consistent, fixed mortgage payment provides. Through this narrative I hope to demonstrate the advantage to buying a home, even in an unprecedented Seller’s Market like the one we are in now.

A Buyer is living in an apartment, paying $2,050 a month in rent. They are ready to buy a townhome. They have been fully approved by their lender for $325,000 but have decided to search under their maximum approved amount so they have some room to bid up, as is a common tactic in the current market. A desirable townhome was listed for sale for $250K; it is more spacious than the Buyer’s current apartment, and has many features the Buyer values. The Buyer put in an offer at $260K with an Escalation Clause, capping it at $2K higher than highest competing offer.

Putting an Escalation Clause in an offer may be one way to place your bid above others on a given home.

The Seller received multiple offers with the highest offer at $298K, $38K above the Buyer’s offer. The Seller’s Agent contacted the Buyer’s Agent and gave the Buyer the opportunity to invoke their Escalation Clause and win the contract. The Buyer’s new offer with Escalation Clause would be $300K

The Buyer rejected the opportunity, refusing to pay $50K over list price, which they considered an excessive amount for the home, even though the Buyer aspires to own a townhome just like this one. (List price is actually irrelevant — how was that price set? Was it set below market value, to bring in more prospective buyers? Over market value, by an aggressive and inexperienced Seller?)  Let’s examine the advantage of buying that home, even at what seems like an excessive price for that property. We will use a five-year period to examine the differences in Renting vs. Buying, as the Buyer wants to “wait it out”.

In this case, the Buyer’s monthly mortgage payment (PITI — Principal, Interest, Taxes, Insurance) and HOA (Homeowners Association) payment for the home would equal the same amount they were currently paying rent for their apartment: $2,050. One of the strongest advantages to buying is related to that monthly payment: With a mortgage, that number never changes. Rent payment will increase yearly, at an average of 5%. Realistically, due to the current increased demand of rental properties, rents are increasing quite a bit more than 5% per year. However, using the modest 5% increase in our model, a rent today at $2,050 will go up approximately $100 per month every year. After five years, that rent is $566 per month higher — $2,616, while a mortgage payment remains at $2,050.

We know that rent rates increase an average of 5% year over year. We also know that home values increase year over year, around the same rate. Following this estimate, the value of a $300,000 home after five years is $382,884.

Including the payments made on principal ($26,684), and market value increases (at a modest 5% Y-O-Y) the Buyer will have $109,568 in equity in their home after five years.

The Renter will not have gained any equity, but has likely been building the equity and wealth of their landlord. Over five years, the Renter will have paid $142,764 to their landlord. Total monthly mortgage payments and HOA equal $123,000. Even after accounting for $7,000 to cover closing costs, the Buyer still comes out thousands ahead of the Renter as far as monthly payments go.

There are definitely costs associated with homeownership that are not part of a renter’s budget: the initial downpayment, home repairs, HOA special assessments, taxes, and insurance. Home ownership can also take up more personal time than renting, as there is not landlord to manage repairs and maintenance.

Since they declined the opportunity to go Under Contract on the townhome, the Buyer is still searching the market. With multiple offers on almost every property and very few days on the market, it remains challenging to win a contract. However, interest rates have risen over 0.5% since they put their offer in and declined to invoke their Escalation Clause and win the contract (winning a contract is no easy feat).

Due to the increase in interest rates, the Buyer’s dollar will not go as far as it did in months before. For every 1% interest rates increase, buying power decreases by 10% of purchase price. A higher interest rate lowers the amount paid on the monthly principal included in that $2,050 purchase price. The Buyer cannot afford the same priced home that they could a few months before. The Buyer will also end up spending more money on interest over the life of the loan. Home prices are rising steadily month-over-month as well, so a townhome that sells for $300,000 this month may sell for $315,000 or more in just a couple of months.

No one wants to buy at the top of the market, and no one wants to pay top dollar. The Buyer’s reservations are understandable. However, our current market is the result of supply and demand. The increase in price appreciation is the direct result of low inventory and high demand. New home construction was low even before the pandemic began, and Millennials and Gen Zs are now in the active buyer group, increasing the number of buyers searching for homes. There are no signs of the market slowing down, and if readers are worried about a crash similar to 2008, this is not that market. That market held high inventory, high demand, and very low financial requirements to acquire a mortgage, with buyers even leaving the closing table with some extra cash, such as with an unsettling 125% loan. That scenario is not happening today, mainly due to more stringent regulations. 

Are home values too high? Are they inflated? Below is a chart that shows a house price index for the Atlanta/Sandy Springs/Alpharetta, Georgia area, from 1995-2022 [fred.stlouisfed.org]. Recessions are shaded in gray. Notice that during and after each recession, home prices continued in their trajectory upwards, except 2008 (The Great Recession), where conditions were very different from today. The housing market has adjusted — recovered — over the last decade, and home prices are back on a similar trajectory as they were before 2008. And apart from The Great Recession, most Buyers always paid “top dollar” for their homes because home values have consistently been on the rise.

As far as protecting yourself against inflation —  what better way to protect yourself than to lock in a mortgage payment and keep your largest monthly cost the same year after year, all the while growing your equity in an investment?  Consider spending $142,764 in rent over 5 years, resulting in $0 equity, or spending $123,000 over 5 years on mortgage payments, ending up with $109,568 in equity . . . It is a good time to buy a home.


I would like to extend sincere thanks to Marc Garfinkel, my colleague and my preferred lender, who works with Prosperity Home Mortgage, part of our Family of Services at Harry Norman, Realtors. Marc initially shared this scenario with me and then encouraged me when I decided to present it here. He enthusiastically assisted me as I worked to create all these charts and figures. I love working with Marc, and my Buyers always benefit from Marc’s down-to-earth approach. Marc provides numerous options to Buyers and he gives clarity to all of us in every situation: he strives to help prospective Buyers think outside the box. He makes himself available to clients after business hours; the demand for this is unavoidable in the climate of this challenging market. (Shout out to Marc for writing up a “Fully Underwritten Approval” letter for my clients’ offer on Thanksgiving Day — we won that contract!)


Great news for first-generation and first-time homebuyers

On October 28, the National Association of Realtors announced breaking news: Congressional leaders have released a long-awaited framework for President Biden’s “Build Back Better” program, which includes hard-fought NAR priorities like investments in affordable housing and down-payment assistance. A top-line price tag and an outline of new social programs directly affect the real estate industry. It includes $150 billion in affordable housing investments.

Funding for the following programs is included within the housing section:

  • Public Housing
  • Housing Trust Fund — Builds and preserves housing for extremely low-income households
  • HOME — Investments Partnership Program — allows state and local governments to use HOME funds for grants, direct loans, loan guarantees or other forms of credit enhancements, or rental assistance or security deposits.
  • Downpayment Assistance — Downpayment loans are forgiven over a certain period, such as five years. The money doesn’t have to be repaid as long as the borrower still owns and lives in the home at the end of the period.
  • Housing Vouchers
  • Minority Business Development Assistance

This bill will be particularly meaningful for lower-income households, millennials, and households of color. It ensures stable, affordable housing for millions of Americans and will enable Americans to improve and/or preserve over 1 million existing homes. Americans often have a distinct and very real fear when it comes to home ownership. This legislation can reach many in need. Industry professionals laud the inclusion of affordable housing provisions in the final bill.

The National Low Income Housing Coalition published an article which describes specifics of the legislation and urged support of the legislation. “We are one step closer to achieving historic housing investments and keeping the country’s lowest-income people affordably housed, but we’re not done yet. We’re urging all members of congress to enact this legislation as soon as possible” said NLIHC president and CEO Diane Yentel.

For more information on the Build Back Better legislation, you can visit WhiteHouse.gov.

Limewash Fireplace Transformation

My family bought our 1980s Williamsburg-style home, in Peachtree Corners, GA, in 2006. The home is tucked near a nice little cul-de-sac, deep in a subdivision full of 1980s Williamsburg-style homes. The homes are not too varied, interesting, or exciting, but do we love our home, our yard, and our neighborhood. The previous owners, who were the original owners, had made some quality upgrades to the house over the years. We have enjoyed continuing with numerous renovations ourselves.


One update we made a few years ago was kind of a big leap for me. It wasn’t a huge project, but was definitely a commitment. We limewashed the brick fireplace surround. When it comes to painting brick, there’s no going back…you can’t really “unpaint” brick. I’ve always felt that brick and wood are some kind of Sacred — you just can’t paint them on a whim! I realize many people feel this way. …but many don’t!

To my eye, the brick in our family room was a drab color, and while the surrounding oak bookcases were a great quality and of nice workmanship, I was tired of the heavy, honey-colored oak. That whole end of the room was dark.

This is from 2016, before we limewashed fireplace surround and painted the woodwork. Even with the inset lighting, that end of the room was dark and kind of blah. The wood and brick colors blended too much.

I looked into adding a fresh, current tile over the brick to update it, but after looking at pricing and logistics, we decided to try the limewash (since it’s inexpensive), and if we hated that, we could reconsider the work and expense of adding tile.

I was inspired by a few photos I found after Googling “painted brick fireplace” and settled on the limewash effect. We went with Romabio Avorio White Limewash Interior/Exterior Paint, which was in stock at Home Depot. I liked the limewash because it wasn’t going to completely cover the tones of the brick. Limewash paint gives a unique “whitewash” effect. The product we chose is a one-coat process, no priming required. That’s what sealed the whole deal for me.  According to the Romabio website this product is toxin free and environmentally friendly. Romabio Limewash is mineral-based and is derived from sustainable materials. . . . Bonus! And we were thrilled with the results!

The limewash process gives an old-world, antiqued/weathered look. Some of the brick color remains exposed, which results in a warmth you just wouldn’t have with a painted brick.

Here is a terrific sampling of the Romabio Limewash colors, found at brick&batten.com.

We decided to keep the oak mantle in place, as is, as it compliments our oak floors, and has a nice, neutral style.  So after taping off the edges by the mantle, bookcases, floor, and ceiling, we were ready to experiment.

The application was very easy. We went with the recommended 50% dilution (see chart below; the .67-gallon can was plenty for our fireplace surround). Before applying the limewash, we misted a 3’x3′ area of the brick with a spraybottle of water. Once the brick was damp, we used a paintbrush to apply the wash. It soaks right in!

Keep your brick damp with water as you apply the limewash.

We adjusted the look by applying plenty of the product and then washing off in random areas, so the brick color would peek through. We were able to balance out the intensity with some vigorous buffing, and there was lots of stepping back to observe, adding or removing the wash, and more observing after that!


This was at the end of the first day. We did remove a little more the next day, as it was a little more opaque than we wanted.

Removal is possible for up to two days after the initial application — very forgiving. This product can be re-applied to add color depth, even past the two-day removal limit. Since the finish is flat, touchups are undetectable. Nota Bene: the product dries more opaque and it looks “thicker” or “darker” when dry than when it’s wet. We ended up removing quite a bit over the next couple of hours, adjusting the amount of brick color and the “location” or “pattern” of the red that showed through.

Romabio Classico Limewash dilution recommendations


1L/1QT.2.5L/0.67GAL15L/4GAL
50%500ml1.25L7.5L
70%700ml1.75L10.5L

After the wonderful transformation with the limewashed  masonry, we decided to go ahead and have the woodwork painted to coordinate with the wall color, Silver Strand (7057, Sherwin Williams). The paint colors we used are: bookcases “Attitude Gray” (7060); wainscoting “Unusual Gray” (7059); all Sherwin Williams colors. 

‘White Rose Trio’ over mantle, by Tatyana Klevenskiy

This update truly brightened this part of my home. Adding the limewash to the fireplace surround and then painting the woodwork gave everything a fresher, cleaner, more updated feel. I just love it!