Half of American renters are cost burdened, for example.
https://news.ycombinator.com/item?id=43119657
(own my primary US residence free and clear, my housing savings goes into investments, which grow faster than inflation)
some parts of california have been affected by insurers more than others, but in those more minimally affected? prop tax is suppressed via prop 13 (for better or worse), and the cost of insurance is a drop in the bucket relative to what id be paying for a roof over my head otherwise tbh
This is done to allow people to age in place, and not price someone out of a neighborhood they’ve live in all their life.
my life cannot be uprooted based on the whims of a crummy landlord or because my obligation has crept out of my budget
i bought conservatively and now have a tiny payment relative to what i’d otherwise have to pay to live in the bay area. peace of mind is hard to put a price on
My current city in central Europe is very renter-friendly. A nice apartment would cost $600k, but rents practically never exceed $1500/month. Under such circumstances an apartment doesn't seem like a great investment.
I've also lived, briefly, in Canada -- where rents were often extremely high relative to home prices. (I have a friend who pays $300/month on a mortgage and rents the place out for $2000/month. At the same time, the house has nearly tripled in value over the past ~7 years.)
I was in a one bedroom apartment, so not like-for-like, but I didn’t need or want anymore space than I had. I was also in a nice area, and in the nicest apartments in that area, as far as I could tell.
A couple people who moved out there when I did bought places, and I heard nothing but regrets from them a year later.
Here a variable rate is norm and has been since I remember.
I was eyeballing a particular house with specific financing in mind just before covid started, and if I'd pull a trigger on that transaction my monthly payement would more than double at some point.
Statistically, I’m in the top ~5% of income earners (from the data I can find), with no debt, and I couldn’t afford $6k/month.
I bought a house because I don't understand the rental market anymore. I don’t really like being a home owner, but the rent prices these days are so out of hand. I think the most I ever paid for rent was $1,680 and I felt irresponsible doing that. I don’t know how all these rentals are full with the prices they’re charging. Does everyone have roommates?
So, yes, $6k per month is house-poor numbers, but it’s workable for sure. If you’re even better off, good for you, it may fall into affordable range.
Maybe I’m conservative, but being house poor while making $300k is insane.
I’m thinking someone would need to be pushing $400-500k for household income. That would put them in the top 3%. I don’t get the supply and demand curve on it. Making that much, and renting. It’s an even smaller market than the full 3%.
6k for a mortgage would be scary in case of job loss, but for rent, whatever, just move.
Plus, if a sizable portion of that household income is in the form of stock or a bonus, that isn’t showing up each month in the paycheck, lowering the monthly cash flow. If there is a layoff early in the year before the bonus pays out, and you can’t exit the lease, that would be a bad spot to be in.
There is still risk on the table, depending on how some of this is structured.
It currently only profitable only of ppl who got super lucky during covid .
Thats like saying it makes sense to buy tesla stock because i bought it at $10
And the stability of buying is undervalued. It's telling that this article frames housing as an investment vehicle rather than as a basic necessity. And it's not just a necessity because it shelters you from the elements and gives you storage for your stuff; it anchors you in a neighborhood and allows you to begin forming a local community. The flexibility of renting that this article glorifies is itself anathema to knowing and befriending your neighbors on anything but the shortest of terms; even if you don't intend to move, you have no guarantee that they won't up and exercise that flexibility. This is a major contributor to the modern loneliness epidemic.
However, I think this depends highly on the personality of the renter/owner, and that is the point this article misses.
If someone is, like myself, comfortable with risks, I'm ok with changing neighbors, locations, and I've lived on 3 different continents and 9 cities?
If you're someone who craves stability, then this isn't for you, and you're proably better off buying a house.
It depends.
Personally, after witnessing both sides of the coin second-hand, I am not leaning in the direction of either buying or renting in absolute. It is highly dependent on the context and circumstances of a specific situation/market.
I am aware that this is just an anecdote (i.e., it isn't going to say much about the overall state of things across all states in the US), but there is a specific example I'd witnessed myself, which led me to believe that this is a bit more complicated than just "renting is the move" and "buying is the move."
TLDR: one of my former coworkers bought a condo in Queen Anne neighborhood of Seattle (which is a highly desirable and expensive neighborhood in that metro area). Within the first year of his ownership, the pipes behind his laundry machine burst due to no fault of his own (while he was at work), and it ended up flooding the apartment of the neighbor below. It decimated the flooring of both his own unit and the unit of the neighbor below. He ended up was facing the costs of unfucking his own condo AND the unit below.
I don't remember the numbers off the top of my head at all (as the whole thing happened around 2018-2019, and I wasn't really involved in any direct way at all), but I remember that he did the math and (based upon the numbers, reasonably) ended up selling his condo as soon as he'd finished fixing his own unit + paying for the fixes to the unit below.
Meanwhile, I am currently renting, and if the pipes in my unit burst and end up flooding the neighbors below, it would be mostly the problem of the property management company running my building to deal with, not mine. This alone make me feel way more stable than if I'd owned the unit I live in atm.
hoas only make sense to me in condo situations - but even then you’re at the mercy of others
There are A LOT of costs which are not explicit when owning a condo.
Honestly I have such low trust in the ability for humans to plan for the future over the now. It is like a bug in our psychology.
As a homeowner I have definitely had some 5 figure costs over the years that were totally unexpected and several in the low 5 figure range that really needed to be done. Doesn't mean I couldn't cover them in some way shape or form but they happened.
This just doesn't happen as often with apartments, where people are more transient and more likely to be single and/or childless.
We need, as a society, to bring back generational communities.
Our workplaces are not our families!
I'll also add, that once you have children, owning your home is a very welcome level of stability.
Nothing worse than looking for a new rental and potentially being forced to upend all your routines and find new schools for the kids as you cant rent in the same area anymore!
owning does not shield you from shit like that, maybe in rural america but definitely not in/around the cities
You brought up a good point though, and that’s the trap of being house poor. Too many owners fail to look / have not been taught to factor local property taxes and maintenance costs into their homes. My network definitely has people caught unaware by escrow shortages, siding costs, roof costs, HVAC stack costs.
Despite it all, US homeowners seem to edge out renters, but it doesn’t have to be causative, either.
https://www.aspeninstitute.org/wp-content/uploads/2024/11/AS...
I think this is the biggest factor if it applies. If we want to be utilitarian about it, the benefit to your kids of having the same school to attend, same neighbors to play with, same room to call their own and paint the walls as they desire, etc. just dwarfs everything else. Kids just do well in stable, predictable home environments.
Befriending your neighbors kind of works in a city but only REALLY works in Amish communities.
I chalk up the difference to the fact that a lot of people my age couldn’t afford to live where I moved so my neighborhood is full of wealthier older people who I have nothing in common with.
In my country, buying a home is the only way to get cheap debt for the vast majority of people.
Detailed analyses exist, e.g. https://www.youtube.com/watch?v=j4H9LL7A-nQ .
As Ben notes the tax advantaged status of primary homes has more capacity than most tax sheltered alternatives.
But a lot of this depends upon income.
This reminds me, I need to buy more DFA. :)
I want to buy some small/medium CAP ETFs but there is nothing really in Canada you can buy off the TSX.
Several companies (including major ones like Blackrock, and TD Bank) offer US equity ETFs denominated in CAD available for purchase by Canadians. This includes some basic sector and factor options, and even some leveraged and other derivative ETFs (but expect MER >1% on these).
Your bank can most likely set you up with a "direct investing" or similarly named option (after doing some KYC stuff of course) that allows you to buy ETFs directly in a TFSA or RRSP. Or you can try a third-party service like Questrade, WealthSimple etc. It's even possible to hold options in a TFSA if you have the right paperwork, as long as you don't give the CRA the impression that you're making a "business" out of "day trading". Once you're set up it should be easy to find "some small/medium cap ETFs", for both Canadian and American (and maybe international) holdings.
tl;dr: talk to someone at your bank. Make sure it's clear you aren't looking for investment advice and want to make the decisions yourself. Or look up those third parties. (If you hold registered accounts at multiple institutions, to my understanding you will be held fully responsible for observing a total contribution limit etc. across all of them.)
As the rent prices keep rising, the renter in the end will end up spending much more money in the same duration as a mortgage, won't they? After a few years, when they end up owning more of the property, they can secure a good deal with better monthly mortgage payments.
They can also quite easily set up an AirBnB or get proper renters, if they want to have some flexibility, and in most cases the rent money will be more than the mortgage payments, so if they want to rent another place of their liking, the additional income will offset the monthly costs.
this touches on something the author sorta hinted at, mortgage as a forced investment. Some buyers/renters won't view the down payment as an investment opportunity if they go the path of renting, they decide to rent and suddenly theyve got a new car loan and all new furniture or whatever, and that down payment is gone, instead of compounding year over year in an attempt to make renting a financial advantage
you can usually napkin math investing the down payment and it makes more financial sense to rent, but from a human perspective its just not gonna happen like that for so many people. they are gonna mess with that money instead.
Any "house" would be too big for me by myself. And buying a condo apartment seems like a strange proposition to me; compared to renting the same space, it seems like just paying extra in order to accumulate some nebulous equity at the end of the term. I'd rather do that with more liquid asset classes.
That sometimes under the right circumstances a home is both a great place to live, the best deal you can get in your area, and also an investment
You sort of alluded to it in your post, but it’s different for everyone, but then you go on ahead and speak as if there were one answer
Good for you you chose to rent - you don’t have to deny homes potentially being good investments to validate your decision
I think this might be a good balance to get us some type of flexibility while also diversifying our assets. But now the problem is trying to find a decent rental property in another city :p
The main advantage of a house imo is that you can't typically rent something comparable, at least where I've lived. The rental market for 4 bedroom houses is tiny compared to the number for sale.
I can only imagine it makes financial sense to rent if you live somewhere where you're not paying off someone else's mortgage and are paying a fair renting price. (Otherwise paying your own mortgage just makes more sense)
As an actual honest question, where in the world is like that any more?
If this had been framed differently, it would be more interesting. Instead it comes across as universal (“most people won’t saved unless forced to”) and ignores the many many benefits of buying. (Not mentioning 5x leverage on a historically good asset is willful ignorance)
As a former renter of 20 years, these are great points that everyone should evaluate. As someone for whom home ownership made sense now, I wish I had been able to prioritize those factors earlier as it would have been nice to have my mortgage locked in at 2010 prices.
Of course, a solid investment plan may offset these - but only a domicile (doesn't need to be a house) would survive everything related to the economy going to utter hell.
I agree about houses, though. A saner plan may be to purchase a modest apartment or the like, that you keep in the wings until you reach retirement.
I looked into this a few years ago when I was trying to see if we were really in the worst housing market ever, and came to the opposite conclusion. https://arriens.us/articles/housing.html
I get good flexibility and value for my dollar. The savings over renting is insane.
This means that, generally, no matter where you buy, you won't want to have bought anywhere else after a few years. There are cases where you might hate it, of course, but you could still sell/rent to someone else and buy/rent elsewhere.
If you get unlucky with no reason to still be in a particular city and that city starts a downward swing, there's no gaurantee it ever comes back and you're stuck taking care of something that you might never be able to sell for anything but a loss.
I will likely stay a renter and keep that flexibility in my new city for a long time after this experience.
https://www.realpage.com/storage/files/blog/posts/images/202...
From a purely financial perspective, I think you could say: the more protections you as a renter receive, the more renting makes sense.
Living in Germany, I do have quite a few protections as a renter. My landlord can't arbitrarily hike prices, etc. In my current city, it would be absolutely impossible to get a mortgage anywhere close to my current monthly rent (even with substantial equity)
My opinion is the issue with renting and housing in general is the world wide financialization of real estate. It's being treated as a primary investment instead of the secondary investment it is. Some fraction of people are getting exceedingly wealthy but there are deep negative effects.
My bet is the crashing fertility rates are likely what's going to put a stop to it. Notable every 15-20 years we have a bigger than the previous financial crisis. Once populations start to decline the bottom will fall out.
A few years ago, I became quite interested in buying an apartment in Germany for rental income. My German friends thought it was a terrible idea. After reading more about it, I realized it would have been a huge mistake!
This quote makes real estate "investors", banks and the government tax revenue service drool over how hard you would work to guarantee your children's future. You're up against soulless, calculating cowards who are more than willing to live themselves in misery for the chance to suck your blood.
When I didn't like mowing the hill behind my house, I had a retaining wall put in. Also preserving the elevated deck.
When I found i didn't like the elevated deck, I build a new ground level one with my father in law.
I'm not sure I like entering into the kitchen so I'll probably put a door into the porch instead.
I'm not saying I couldn't just rent a new place to find better digs. But I hate moving, hate shopping for new houses, love this yard and house in general, and am not paying more month to month than I was when renting (and get much more space for the dollar).
I don't want this place to make me rich, in the above you might get a sense that I already feel content. That's my decision criteria and I don't know why that's incorrect. You don't have to run a household like an investment company.
"The flexibility of renting has major financial advantages"
Like 80% of my motivation to make money in past was: to buy a house. I have no interest in FIRE and be a couch surfing digital nomad around the world or whatever.
So it's hard for me to be motivated by the financial aspect if the end result was no house for now basically.
I don’t want to be a real estate developer writ large, but I do want to develop my own space and optimize it for my family as it grows and changes over time.
No, don't be emotional, don't buy your own place and have stability. Own nothing and be happy! Let the corporations own everything and have "flexibility (TM)"
Every time I see someone arguing about minimum wage, their benchmark seems to be having a 2 bedroom apartment, not a studio or even a 1 bedroom. I find this wildly unrealistic.
Apartments also sell people on amenities that almost no one uses, but justify higher rent prices.
These luxury apartments are used in the same way people use their over-bought homes. It’s a way to buy into a different class of neighbors, feel like you’re not sacrificing with a rental, signal to others that you’re doing well, ideally have better management/maintenance, and live in a place that out-classes the home they may otherwise buy… all with no maintenance or investment.
I’ve seen some crazy rent prices. I’m not sure who is renting these places, but someone must be, because they keep building them.
I prefer renting, but I ended up buying a house because rent prices starting going up beyond what I felt with reasonable.
and while its not necessarily wrong, I believe it under weights a few points:
- Fixing your housing costs against inflation: You can't count on housing price increases, but you can count on inflation. If you buy a house and your mortgage payment is > rent. Overtime it will naturally flip. $1 no longer buys me a chocolate bar, and $800/month no longer gets me a 2 bed apartment.
- Leverage: I can't get a $700k loan to put into equities but I can for a home.
- Capital Battery: As I build equity in my home it can become an asset I take loans against to pursue other opportunities.
- Flexibility: Should I need to fiscally downsize I can still move out and rent out. Or rent a portion either via a suite or secondary unit
- Stability: No one can evict me into a hot rental market to suit their needs.
I wish more people talked about these points, selfishly so I didnt take so many of these articles at face value because in hindsight I wouldve bought earlier.
Renting it out is also not always gauranteed or easy if you are not nearby or don't want to deal with being a landlord, so imho that flexibility is not really there in many cases.
The bank can, if you take out too many loans against your house that you can’t pay back. When you barrow against your house you’re increasing your risk.
“Rational people don’t risk what they have and need for what they don’t have and don’t need.” - Warren Buffett
My house is paid off now and I can’t think of anything that would make me barrow against it. Setting aside variable maintenance costs, with only having to worry about property taxes now, I could work at Costco and make ends meet now. That gives me some peace of mind against an uncertain job market. A loan against the house would change that equation wildly.
If this is still accurate, a third of renters could theoretically be told the rent is doubling or learning the lease is ending. Depending on the health of the market, that can be a major risk, and not everyone can or wants the flexibility of a rental at all times.
https://www.bls.gov/spotlight/2022/housing-leases-in-the-u-s...
Any sort of serious buy vs rent calculator already takes this into account, for instance the one on nytimes
>- Capital Battery: As I build equity in my home it can become an asset I take loans against to pursue other opportunities.
That feels absolutely insane to me, especially when you consider that by the time you built up significant amounts of equity you'll have significant commitments (eg. college age kids) and/or be close to retirement. Going 3x on S&P500 might be justified when you're a new grad, but not beyond your 30s.
>- Flexibility: Should I need to fiscally downsize I can still move out and rent out. Or rent a portion either via a suite or secondary unit
How is this more flexible than the counterfactual of renting?
Exactly, and most people wouldn't even be able to get half of that for investing in a business that turns a profit and employs local people. So that's why all money is rushing into real estate and the industrial world is dying now. And death is forever.
Paying perpetual interest on a non-productive asset doesn't sound like a good idea, to me.
I've been a homeowner for 30 years and am now renting a temporary apartment in a new location. There's a lot of upside of renting. I don't like apartment living at all, but I don't feel anchored to the location at all and have the freedom to live wherever without a bunch of overhead. I'm definitely spending more money per square foot renting, and obviously none of this is coming back to myself or my family, but that's ok for me right now.
I think my main takeaway is that there is no rule about what is best. It's what's right for you at that time of your life. A house is nice when you have kids and want some stability. Renting is nice when you want freedom and flexibility.
“Hey I’ve got an idea. We’re always talking about good investments. What if we came up with the worst possible investment we can construct? What might that look like?”
Well, let’s see now (pulling out our lined yellow pad), let’s make a list. To be really terrible:
- It should be not just an initial, but if we do it right, a relentlessly ongoing drain on the cash reserves of the owner.
- It should be illiquid. We’ll make it something that takes weeks, no – wait – even better, months of time and effort to buy or sell.
- It should be expensive to buy and sell. We’ll add very high transaction costs. Let’s say 5% commissions on the deal, coming and going.
- It should be complex to buy or sell. That way we can ladle on lots of extra fees and reports and documents we can charge for.
- It should generate low returns. Certainly no more than the inflation rate. Maybe a bit less.
- It should be leveraged! Oh, oh this one is great! This is how we’ll get people to swallow those low returns! If the price goes up a little bit, leverage will magnify this and people will convince themselves it’s actually a good investment! Nah, don’t worry about it. Most will never even consider that leverage is also very high risk and could just as easily wipe them out."
Buying a house is often an emotionally motivated decision with many important risk factors... Were inspections comprehensive and thorough or did they overlook an issue with the foundation, wiring, plumbing, etc.? Did the buyer understand the required disclosures, and specifically understand what the seller is not obligated to disclose in their jurisdiction? (e.g., in many areas the seller is not obligated to disclose if a child sex offender lives next door). Is the neighborhood up and coming or struggling?
Getting these wrong can easily negate the potential upsides of ownership.
Renting can also be great, but as the article points out, if it mostly just results in more disposable cash, then you may be better off owning (forced savings). Rental properties often cannot be sublet and also cannot be used as collateral or passed on to family members with a step-up in basis. Rental leases also fluctuate with the market, so it's not uncommon in big cities for renters to be paying close or equal prices of their homeowners next door.
Anecdotally I know many folks who have rented their way through, invested wisely, and done well. I also know folks who have moved around the US and always purchased, did their homework, capitalized on tax incentives, and now have a stable of rental properties that helped them become FIRE.
> The math can always be made to “work” if you’re willing to adjust what or where you buy.
This is essentially a useless statement, the result of the math is either that either renting or buying makes you end up more wealthy. Whether it "works" or not isn't even the question, the question is which choice makes you more wealthy over time (more on that later).
For that, it's more helpful to use a rent vs. buy calculator [1] with the details of your market plugged in. Whether renting or buying makes more sense for you has a lot to do with where you live.
Let's continue on to the next section, "Buying a Home Isn’t Really an Investment."
The obvious rebuttal to this is "of course it is!"
> The decision is usually driven by lifestyle factors such as proximity to work, school districts, family, and the neighborhood.
All of these factors play in to whether or not the property is a good investment. Places that are in good school districts and have close proximity to job centers are good investments. The real estate investors that this section mentions think about these exact same things before starting projects.
Next section: "People Tend to Overbuy." Is there any data or evidence behind this whole paragraph? Are we just saying that people who own homes buy more furniture and stuff than renters? Maybe they do, but even if that's true could that be because they're more wealthy in the first place? Who knows, this entire paragraph is all assumptions and nothing backing it up.
Next section: "The Flexibility of Renting Is Undervalued"
6/10 Americans live within 10 miles of where they grew up, and 8/10 Americans live within 100 miles of where they grew up. [2] Is the flexibility of renting actually needed for most Americans? Are Americans missing out on job promotions because they own homes? (It's not like you can't sell a home quickly)
I would counter the premise of this section with "The stability of home ownership is undervalued" and "the 30-year fixed mortgage is a gigantic subsidy to homebuyers." By taking out a mortgage, homeowners are locking in the majority of their monthly cost with the exception of maintenance, utilities, and property taxes. They sit in their house for a few years and they end up paying below market on monthly payment compared to renters. So maybe they "overbought" a home with too many bedrooms to fit all phases of life, but it doesn't really matter because after the first ~5-10 years of home ownership they are going to be paying less than market-rate rentals.
The 30-year fixed mortgage allows homeowners to refinance and minimize their rate pretty much any time the rate drops, so basically every renter is always getting the lowest rate possible since from their purchase date forward, and it never goes up.
The last section: Why the Home Investment Myth Persists
Sure, this section is technically correct, someone investing money elsewhere is going to beat real estate on returns. But you can't live in an index fund, an index fund may not have the same protections [a] and tax incentives as a home, and it is a fact that most people are not disciplined with investments which means the forced investment of a mortgage's end result is that homeowners are far more wealthier than renters on average. [3]
[a] For example, your home equity doesn't count toward the ability to pay calculation for FAFSA, and you are generally protected from having your home taken away from you if you get into most debt situations. Check out how OJ Simpson avoided paying his civil judgment: https://www.kiplinger.com/retirement/how-did-oj-simpson-avoi...
[1] https://www.nytimes.com/interactive/2024/upshot/buy-rent-cal...
[2] https://www.census.gov/library/stories/2022/07/theres-no-pla...
[3] https://www.nar.realtor/magazine/real-estate-news/study-home...
Why there is no exponential taxes for owning that many properties after they are finished?
Here where I live the minimum price for rent is monthly mortgage installement, meaning that you'll pay for rent at least as much as you'd pay for mortgage.
But after you pay your mortgage you still have an asset in your hand. You can pass it on to your children or you can sell it when you're old, downsize (or even rent) and get some cash for your retirement. If you rent you're left with nothing.
Then why is not everyone buying? Because few people can afford the 20% downpayement needed for mortgage. In reality it's even more because you have to furnish and/or renovate the place.
Renting has it's charm for youngsters, but once you get older and you start acummulating things the lack of stability and the danger of your landlord having a change of heart and breaking the contract (either because he decided to sell it or give it to a child) becomes a pain in the ass. Even having a pet is troublesome and many property owners will refuse to rent if you have a dog or a cat.
Well, no. You're left with the cash you would've spent buying a house.
Whether that's financially better or worse, depends entirely on the mortgage interest, taxes, and maintenance costs of the house, as well as the money you could have earned investing the cash elsewhere, compared to the rent you would have spent over the same time period.
If you want to compare the costs of renting and buying, you need to compare renting=(rent payments + renter’s insurance) vs. owning=(mortgage payments + property taxes + insurance + maintenance and repairs + equity appreciation / depreciation)
> Average rents are cheaper than average mortgage payments (homeowners insurance and property taxes included) in all 50 of the largest U.S. metros in 2025, with the cost difference between the two growing in all but 12 of those metros since last year, according to Bankrate’s Rent vs. Buy Study.
> Over the last year, the study found average mortgage payments (including principal, interest, homeowners insurance and property taxes) increased while average rents either declined or remained stable in nearly all the metros we analyzed.
> Housing experts said the fact that it’s cheaper to rent in all 50 metros in 2025 is a broader reflection of rental and housing market conditions across the country.
[1] https://www.bankrate.com/real-estate/rent-vs-buy-affordabili...
The average mortgage is for a family, the average rent is for a broke young worker or student living in a much smaller and worse accommodation.
Renting is always more expensive than a mortgage for the same housing unit, because the landlord needs to make a profit from his tenants.
Cooking the numbers won't change reality. The truth beats all the lies, no matter how many lies.
Ben Felix, a popular financial YouTuber, made many a video about the math:
https://youtube.com/watch?v=j4H9LL7A-nQ https://youtube.com/watch?v=lBG-g1CKfgs
>Renting has it's charm for youngsters
You're sort of contradicting yourself. So long as you think you're sort of settled in an area, buying is probably better.
But, if it's your first job out of school, even if you have a nice bunch of money you could put towards a down payment, it's not clear that buying is a great idea except maybe if you're in an area with lots of jobs for your chosen profession.
Once I bought, somewhat belatedly, I was in an area that offered enough possibilities in my (broadly speaking) field even if a couple commutes were on the long side.
In most cases people will need to get a half decent job and save for a few years first but they can keep saving and have enough for another property in few years.
And if you really have to move - then you can still sell that property. People are getting new cars every 2-3 years and it's not that different from swapping real estate.
Of course it is. I think the average American car age is 11 years or something like that. But, if I wanted to swap cars like that, I can go into a dealer and basically transact it in 30 minutes. Good luck doing that with a house.
https://www.axios.com/2025/06/03/homes-buyers-sellers-redfin
https://fred.stlouisfed.org/series/ACTLISCOUUS
When it was a sellers’ market, I knew people who sold in days, and buyers who lost out offering 50, 75k over asking price. Today, not so much.
Current state of the British economy is the state is looking to allow 40yr 5% deposit mortgages. We're not quite there yet but it's heading that way. Be very thankful if your country isn't that bad!
Recently, our government is making a change to allow first homebuyers to purchase properties with only a 5% deposit.
Historically the Australian government set up the Housing Loans Insurance Corporation in '67, to provide insurance for banks against the risk of borrowers defaulting, to support home buyers. In 1997 the Howard government privatised the HLIC by selling it to GE, and we've had a private sector for mortgage insurance since, compulsory if borrowers are borrowing more than 80%.
Now in 2025 the current Albanese government is rolling out a scheme where the government will act as a public mortgage insurer again to allow first home buyers to buy with only a 5% deposit.
I'm not quite sure what to think. I heard an economist interviewed who reckoned this was a great idea to make it easier for young people to get into the property market, arguing that Aussie homeowners historically hardly ever default on mortgages. But naively it seems like this is yet another change that is going to push up house prices even further by increasing demand, without doing something to increase supply.
I also wonder if systemic mortgage default risk appears like it is lower than it actually is because Australia has been lucky enough to escape a major recession for so long.
When you own, the mortgage payment is the floor on your monthly cash outlay. by contrast, when you rent, the rent is the ceiling on your monthly cash outlay. So even when they are identical, homeownership is way costlier because of all the other costs one "forgets" to consider while making this comparison. HOA dues, home insurance, property tax, maintenance, etc. add up to thousands of dollars each year. As a renter, you don't have to consider any of these beyond your rent.
As a renter, all of these are baked into your rent :/
My thought experiment is basically: If I get a new job in a new city, is it smart buy a house right away? And if the answer is not always "yes", then obviously buying is not always the best option.
That's... really not correct. And the section that follows the heading doesn't talk about (or even try to define) "investments" at all.
A home mortgage is a heavily (!) subsidized, very safe, easily-acquired and extremely leveraged investment in an asset class that tends over long terms to grow as well as anything else.
A young professional looking at a putting $100k into stocks or as downpayment on a $500k (!) mortgage is just a no brainer. Fast forward 20 years and the 5x is applied to all the appreciation.
Buy homes, folks. Worry about renting only when you're old and are making the decision as to whether to by your fifth home for cash or to finance and put the money into another asset class. The only time you decide not to is when you know a priori you can't hold the property long enough to cover the purchase overhead.
(That said: there are lots of macroeconomic and environmental reasons to think a culture where everyone should buy a home is a bad thing. But in our culture, everyone should buy a home.)
Have you ever seen a realestate agent renting? So, does that make you think - maybe ownership has more benefits!
Money is a means to an end, and being happy is a fine end. I only live once and if I can be happy, well then I've pretty much won. Also you're not going to "get rich" by renting, if (and it's a huge if) you can somehow make renting work in your financial favor compared to buying, it's going to be a tiny bit better. You're not going to 10X your income renting.
He also completely discounts the cost of moving constantly (aka "flexibility"), movers, deposits, furnishings... it's not cheap. Yeah you can move yourself (add in the cost of vehicle to make that happen) but it's going to take time, and time is money.
This is not a well thought out article.
The most convincing argument for buying housing is that it hedges you from potential large future cost of living increases. If you can’t afford repeated rent increases then the consequences will ripple through your life.
I’ve heard this pithily stated as “you are naturally short housing”.
https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
Another newer argument is that if you think inflation could be much higher in the future, then a 30-year fixed-rate mortgage is a very attractive instrument; it’s a government-financed option. May as well benefit from it while it lasts. (If rates go down you can just re-fi.)
Rent is going up A LOT every year. My parent's house in a similar area is not, even with extra taxes, it is far lower than what I pay.
They fix up something, its fixed. We have a problem -- it will be fixed in the cheapest possible terribly looking way.
And rent keeps going up. All the time. By so much.
There's flexibility in it when you're in your 20s. But in 30s and 40s its terrible.
Holding the assumption that your landlord operates on favorable conditions (mine is pretty responsive and rent increases are controlled), I’m not sure I have a good reason to opt to purchase a house unless I’m planning on occupying it for the next 2 decades at minimum.
I can’t help but think purchasing is an emotional decision, unless the location you live in allows you to buy for a similar rate to the mortgage pricing, but I’ve only observed this in LCOL areas.
You seemed to have missed one unique attribute of land. They’re not making any more of it.
If you are a single person who is likely to get married and/or move for work, why would you buy? The transaction costs of buying and then selling are non trivial.
On the other hand if you are with your wife and kids, the potential ability to move for a job is less important (objectively) than community you are establishing for your kids and family. So it's not just those who value stability vs flexibility as a behavioral trait but as a realistic reflection of a situation.
It's like a bike guy becomes a minivan guy when he has 3 kids.
https://www.nytimes.com/interactive/2024/upshot/buy-rent-cal...
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