Meet Emma and David, both in their mid-30s and working in senior engineering roles at different tech companies in San Francisco. They’ve built up a net worth of about $2 million through years of saving and investing. They rent a comfortable apartment in the city with their two kids, but like many families, they’ve been asking themselves:
“Is it time to buy a house?”
The Dilemma
They love living in SF, but with rising rents, peer pressure to “settle down,” and an urge to give their kids stability, Emma and David wondered whether buying would be a smart financial move — or a costly mistake. Instead of relying on rules of thumb, they decided to run the numbers through Nauma, building two detailed financial projections.
Scenario 1: Keep Renting
In the first projection, they modeled their life continuing as renters:
- Rent payments continue, but no down payment
- Future expenses included: kids’ schooling, college, healthcare, and even car replacements every 10–15 years.
- Future income sources like Social Security and possible rental income were factored in.
Result: Staying renters would allow their wealth to grow steadily, leaving them with an estimated $12M net worth (today’s dollars) at retirement.
Scenario 2: Buy a Home in SF
For the second projection, Emma and David considered buying a $3M home:
- $600K down payment (20% of purchase price).
- $50K in closing costs and $150K for moving and furnishing.
- A $2.4M mortgage at 6.25% → ~$14.8K per month.
- Ongoing costs: $30K per year in maintenance and $3K in insurance.
Result: While still affordable, this path dramatically reduced their future flexibility. Their projected net worth fell to $6M (today’s dollars) at retirement — only half of the renting scenario.
What They Learned
Emma and David could buy today without going broke — but the opportunity cost was enormous. By locking so much capital into a home in a high-rate environment, they risked cutting their long-term wealth in half. It didn’t mean they shouldn’t buy, but it reframed the question:
- Is homeownership worth the trade-off in future wealth?
- Do lifestyle factors (schools, stability, pride of ownership) outweigh the financial downside?
The Takeaway
For Staff Engineers in SF, the break-even isn’t just about comparing rent to a mortgage payment. It’s about how buying affects your long-term wealth, liquidity, and goals. Emma and David realized that for now renting lets them keep options open, invest more broadly, and give their money time to compound. When mortgage rates fall, or if they prioritize stability over net worth, they may revisit the decision.
⭐ Curious about your own rent-vs-buy break-even? Like Emma and David, you can build projections with Nauma and see exactly how the decision impacts your future.
