Buying a House During Residency: When Does It Make Sense to Stop Renting?

Matching into residency is exciting...but it is also a whirlwind.

You find out where you’re going, suddenly have to figure out an entirely new city, get through credentialing and onboarding, find somewhere to live, pack up your life, move, unpack, and then somehow be ready to start residency on July 1. 

For a lot of physicians, buying a house during all of that simply doesn’t make sense.

Renting gives you one less major decision to make at a time when almost everything in your life is changing.

But now it’s fall.

You’ve been in your new city for a few months. You know where the hospital actually is in relation to everything else. You’ve figured out what your commute feels like at 5:30 in the morning instead of what Google Maps told you it would be. You probably have favorite coffee shops, restaurants, grocery stores and neighborhoods.

The city is starting to feel a little less new.

And if you’re in a longer residency program, you may start wondering whether it makes sense to continue renting for the next several years or whether buying a home is something worth considering.

There isn’t a universal answer.

Especially with interest rates where they are today, I don’t think every resident should automatically be encouraged to buy a home just because they technically can.

But this can be a really good time to start asking the question.

How Much Training Do You Have Left?

This is probably the first thing I would look at.

If you’re entering a five-, six- or seven-year training program, you have a very different timeline than someone who expects to leave the city in another year or two.

Buying and selling both cost money. There are closing costs when you purchase, maintenance while you own the home and expenses when you eventually sell.

That means time matters.

The longer you expect to own the property, the more opportunity you generally have to build equity and potentially recover some of those transaction costs.

That doesn’t mean there’s a magic number where buying suddenly becomes the right answer.

But if you know you have another four or five years in the same city, it may at least be worth running the numbers.

Now That You’ve Lived There, Where Do You Actually Want to Live?

This may be one of the biggest advantages of renting when you first arrive.

You got to learn the city before committing to it.

A neighborhood you thought would be perfect during Match season might not actually fit your life once you start residency.

Maybe you thought you wanted to live downtown but now realize you would gladly drive another eight minutes for a yard.

Maybe you discovered that your 20-minute commute becomes 40 minutes during shift change.

Maybe all of your friends live in a completely different part of town.

Or maybe you absolutely love the area where you landed and now know you could happily stay there for several years.

Those are things that are hard to know when you’re trying to find housing from another state while simultaneously graduating from medical school and completing credentialing paperwork.

A few months of living somewhere gives you information that Zillow never could.

Compare More Than Your Rent to a Mortgage Payment

This is where I want residents to be careful.

If your rent is $2,200 per month and a mortgage payment would also be around $2,200, that does not necessarily mean buying and renting cost the same amount.

Homeownership can also include property taxes, homeowners insurance, HOA fees, maintenance, repairs, utilities and closing costs.

There are also benefits to owning, of course.

Part of your mortgage payment goes toward an asset you own, and over time you may build equity through both principal payments and appreciation.

Buying should still make sense within your actual budget. The goal shouldn’t be to stretch yourself just because you qualify for a physician loan. Residency is stressful enough without worrying about whether replacing an HVAC system is going to wreck your finances.

And Yes, We Have to Talk About Interest Rates

This is probably the biggest difference between residents considering buying today and physicians who purchased several years ago.

So when someone asks me, “Should I buy now or wait until rates come down?” my answer is usually that we need to look at the numbers in front of us today. We need to speak to a few different lenders who offer physician and conventional mortgages.

Could rates come down?

Absolutely.

Could you potentially refinance later if they do?

Yes.

But I would never want someone to purchase a home that only works financially if interest rates eventually drop.

No one knows exactly what rates are going to do.

The house needs to be comfortable for you at today’s payment.

Think About What Happens After Residency, Too

You also don’t necessarily have to look at this as, “I have three years left in residency, therefore I will own this home for three years.”

Your life may look very different by then.

Maybe you stay for fellowship.

Maybe your hospital offers you an attending position.

Maybe your spouse or partner builds a career there.

Maybe you fall in love with the city and decide to stay.

Or maybe you leave immediately after training.

You obviously don’t need to know the answer to all of that today.

But it is worth thinking about the possible exit strategies when you choose a property. Would the home appeal to another resident or young professional later? Could it potentially work as a rental if you moved? Is it in an area with consistent demand?

Those questions may matter just as much as whether you personally love the house right now.

Physician Loans Make Buying More Accessible—But They Don’t Make It Automatically Smart

One of the unusual things about buying a home as a resident is that there are mortgage products specifically designed for physicians.

Depending on the lender and program, physician loans may allow very low or even zero down payments, avoid private mortgage insurance and account for the unusual financial profile of physicians who may have significant student debt but strong future earning potential.

They can be incredibly useful. AND they are still just a financing tool. 

Being approved for a certain purchase price does not mean you need to (or should) spend that amount.

I would much rather see a resident buy something comfortably within their means than become house-poor during some of the most demanding years of their career. And sometimes the best use of a physician loan is simply knowing that the option exists when the right home and timing come along.

Renting First Wasn't Wasted Time

I think this is worth saying because physicians sometimes feel pressure to catch up financially.

You spent years in school while friends bought houses, built careers and started investing.

Then residency starts, and suddenly it can feel like you should be doing all of those things at once.

You don’t have to.

If you rented when you moved for residency, you didn’t miss an opportunity. You bought yourself time to learn.

Now you know the hospital. You know the neighborhoods. You know your schedule. You understand your expenses better.

And you probably have a much clearer picture of whether this city could feel like home for the next several years.

That puts you in a much better position to decide whether buying makes sense.

So When Should You Start Thinking About It?

Earlier than you might think.

You don’t need to be ready to make an offer next weekend before you start exploring your options. You can meet with a physician-loan lender and find out what your payment would actually look like. You can compare those numbers with your current rent.

You can start watching homes in the neighborhoods you now know you like.

And you can talk with a real estate professional who understands physician relocation. It is okay to talk about what buying and eventually selling might realistically look like.

Then you make the decision.

Maybe buying this year makes sense. Maybe next year does. Maybe continuing to rent through residency is absolutely the right answer for you.

The goal isn’t homeownership for the sake of homeownership.

It is making sure your housing decision fits your training, your finances and the life you’re building in your new city.

At Moving Medicine Partners, that is the conversation we want physicians to have.

Sometimes helping someone with real estate means helping them buy a home. And sometimes it means helping them realize they don’t need to buy one yet.