Hi,

My fiance and I have no financially responsible parents to guide us on the responsible rent vs buy decision - we've done a good amount of internet research but it seems that there is a lot of mixed information out there when it comes down the rent vs buy situation. Add-on to that is a number of my home-owning co-workers who tell me that I am absolutely throwing money away by continuing to rent in our current situation.

Here is our situation:

My partner and I make a combined income of ~315k. She has been in her current job for 2 years. I've been in my current job for 5 years. Neither of us plan on making any major career changes that would necessitate moving anytime soon. We don't have any children and don't plan on any in the foreseeable future (likely never but its still not yet decided).

We have a total of about 40k in savings, though we are hoping to use that to exercise stock options that fiance is currently being offered.

We currently live in the Bay Area so the housing market here is a bit of a mess. We are currently renting 2900/month. She has about 30k in student loan debt through private loans that she pays 600/month (can't recall what the interest rate was but I am fairly sure its close to 4%?). I have ~180k in student loan debt that is through a government backed loan that is currently on an income driven repayment plan. The payments are currently in automatic forbearance due to covid, but will likely resume in January for ~700/month on an income-driven plan. The 180k will be forgiven after about 5 more years of payments due to PSLF. ~500/month car payment for the one car we use between us.

So monthly expenses:

~3200/month for rent/utilities

100/month for phone plans

500/month for car

1300/month student loan payments

500/month food

Overall, after taxes and 401k/457(b), etc - take home pay is ~13,000/month combined.

Both of us have credit scores in the high 700s.

We both operated under the assumption that we realistically needed to save up for 20% down payment before even considering buying a home, which puts us a number of years out. But I'm reading that we can potentially buy a home right now with a much lower down payment if we are willing to deal with PMI. If we bought now we would ideally like to aim for a place in the 800k/1 million range which seems about average for the Bay Area in the location that would be central to both of our employers. Not sure if that is a realistic range.

Are my co-workers right? Are we throwing money away on rent? Or do we need to get into a home while interest rates are very low.