At the end of the day, buying vs renting is as much a personal decision as it is a financial one.
The no credit thing will impact your decision. I would recommend getting a credit card, using it for regular expenses (gas) and paying it off in full every month. You need to start building some sort of credit record.
Renovation / custom improvement of your living space has always been my #1 selling point in purchasing vs. renting. To me, there’s nothing better than being able to paint the walls my own color, build pull out cabinets to hide trash cans, install custom drawer organizers specific to what I want to put in that room, and my latest kick – smart home features. Living in a rented place is very very much living in someone else’s house and definitely feels that way.
That said – you make a good point about the neighbors/neighborhood and being able to leave if you don’t like them. I love my house, I love my neighborhood, I love everything about my current situation… except the people next door. I don’t hate them I just wish things were different. I have said many times I would love to move because of them. If we were renting, I’d have left years ago.
Ultimately, no one here can give you the right answer for you.
I purchased a home when I turned 21 (25 now). I was in the same exact situation you’re in now. I lived at home and I had never lived alone before. I live in the Midwest, and the market 4 years ago was very good for buyers. I had a 775 credit score by the time I was buying, so I got very good rates, but my purchasing power wasn’t significant. I was approved for only $115,000 (even though budget wise, I could afford $140,000 – $155,000).
My realtor and I came across a foreclosed auction house. It was a 3 bed, 1 bath, 1100 (finished), 400 (unfinished) sqft house in a desirable school district. It needed paint and carpet immediately, but that was about it. Auction start price was 90,000, I bid my approved max. I was fighting against flippers, none of them were going to live in the house, so I went all in.
Closed in October 2015. Been there nearly four years now and my journey thus far has been… /okay/. I have ZERO experience in home renovations, painting, and owning a home. There is A LOT of unforeseen expenses. Upon moving in, I immediately replaced the kitchen floors and appliances and repainted every wall, this was very minor and easy.
After the immediate fixes, I saved for furniture. I only had bedroom furniture because I previously lived with my folks. Took me nearly 2 years to fully furnish the office, guest room, living room, and dining room. Mainly because things kept piling up.
In fall of 2016 one of my backyard trees blew over and destroyed my fence. I didn’t file an insurance claim. I went on YouTube, bought a chainsaw, fixed the fence myself and broke down the tree. Took a weekend to finish myself. 8 months later my last giant tree fell over and landed on my neighbors roof and my roof. My insurance paid for a new roof ($1000 deductible), her insurance covered hers instead of mine (I wasn’t liable because the home inspection showed the tree was in great condition in 2015).
Stuff like this happens all the time, and owning a home is honestly about rolling with the punches. If you can’t handle it, or don’t want to deal with it, you won’t succeed.
In four years I’ve had these emergencies:
2 fallen trees, one smashed roof (insurance, $1000), part of my deck destroyed and rebuilt ($2000) furnace unexpectedly stopped working ($1700), kitchen/3 bedrooms/bathroom/entry floors replaced ($2600), bathroom subfloor and tub leaked water; had to replace subfloor and drywall ($500), snowblower/mower replaced fixed ($500), just bought new floors to finish the rest of the house ($3000), and now my AC unit needs replaced ($3300).
There’s also landscaping improvements, decorating, re-finishing decks, lawn maintenance, etc.
It’s a lot of freakin work. But YouTube has been my savior for quite a bit of it. And for the record, I don’t work a manual labor job. I’m an office worker, I’m not fit by any means (5”11, 245 pounds). Doing this work has pushed my physical boundaries A LOT, but the house is my pride and joy and it keeps me motivated.
It really, really comes down to what you want to do. If low-effort living is your thing, rent. If telling your buddies you can’t go to the bar tonight because you have to mow, fix your front door catching on the frame, and lay down fertilizer is your thing, buy a home.
Edit: there’s also A LOT of things no one preps you for. I didn’t know I needed to refill my water softener every so often, or clean my radiator on my AC unit once a month. How to maintain my driveway when it needs to be re-caulked. How to pour concrete in a mailbox post to stop it from falling over, how to lay a slab of concrete at the base of your deck steps to stop it from sinking. How to lay down landscaping fabric with rock pavers. How to file my taxes with assets. How to change my thermostat to a newer model. When to call someone to add attic insulation. There’s a lot of learning experiences, and lot of them happen AFTER something bad happens, because that’s how you learn.
Edit 2: Sorry, I’m trying to be as transparent as possible to help you with your decision. My loan was a 3% Conventional NIFA. Basically it assists with the down payment of a home while still acting as a HBA loan. There’s rules and regulations for NIFA loans. Such as: no roommates, must make between X and Y amount a year, must be an HBA loan, and it’s mostly through local credit unions or specific national branches. My mortgage is $938.76 a month, I still have my PMI, and my total cost with Utilities, Internet, Trash Services comes out to $1138 in the Midwest. In saving the down payment aspect of the buying process, I was able to upgrade the kitchen appliances and start the new flooring process.
I’ve been slowly contracting work out that I cannot do myself for my unfinished basement. When I’m finished, I’ll re-evaluate my homes worth, refinance my mortgage, and drop the PMI entirely. Bought for $115,000 and after everything’s said and done I’ll be sitting around $150-160k market value in current standings.