I'm 27 years old and have about 50k saved up in cash, and about 40k in retirement accounts. My living expenses are about 10k/yr, and I have no debt. Earlier this year, my SO and I moved in to SO's brother's house, where we only pay 500/mo in rent (including utilities), so 250 each (our finances are separate). I have the goal of early retirement, ideally in around 15 years. To meet this goal, my major concern regarding living costs is housing. Although our rent is extremely low at the moment, I anticipate in a year to year and a half (at most), we will want to get our own place. If I don't buy a house, we will of course end up renting somewhere at a higher cost. My concern is that house prices and interest rates will only continue to rise, so I will be missing my chance to lock in a lower price & rate if I wait until we need to move. Since last year it seems like houses have already gone up 10+% and a 30-yr interest rate is a full 1% higher. However, using the NYTimes rent vs. buy calculator, buying is still cheaper than renting after only a couple years, for the areas and types of houses that I've been looking at.
A few other bits of information:
-I would be buying by myself, since my SO doesn't have any savings, our finances are separate, and doesn't necessarily have the desire to buy a house at the moment (would strongly support me in doing so however), but would pay me rent (probably around 500/mo + utilities). Nevertheless I would technically be able to afford all the costs myself.
-I am looking at houses/condos ranging from around 170-240k. Mortgage (+tax & homeowner's insurance) payments in this range would be around 750-1100/mo. Equivalent rents would be 900-1400/mo. (I recognize that there are many other costs of homeownership as well).
-I'm torn between buying on the lower end of that spectrum with a 5/1 ARM at around 2.8% and buying on the higher end of that spectrum with a 30-yr mortgage. On the lower end (170-190k), I think we would only want to stay there 5-7 years at most anyway. I could save 20-30k per year to go towards paying off the mortgage in that amount of time, and/or count on selling it before or soon after the interest rate increases. On the higher end or if I stretched up to around 250k, I could see us staying for 10-15 years. Of course all this is moot if it's a dumb idea in the first place.
-Buying would also improve our living situation from what it is now, since we rent a small basement room in an older house -- we are fine with this for now, but it would be nice to improve. We would also be closer to family, and my SO's commute would decrease from 30 minutes to 5-10 minutes.
-My job is very stable.
-We plan to stay in the area indefinitely.
I know that I'm in an astonishingly good situation at the moment with housing costs. Would it be foolish of me to give this up unnecessarily, on the speculation that houses and interest rates will be significantly higher in 12-18 months?
Everyone I've talked to (family members & SO) has said it seems like a good idea, which disturbs me in that I'm not hearing the downsides. And they don't really share my perspective/goals on financial independence and early retirement, so I'm hoping you mustachians can share some insight!