As someone that happily rents (I enjoy the increased optionality that comes with this option), the constant push to get everyone to own a house seems weird to me. Yes, we should make it possible to own a home, but it doesn't need to be the only option.

Also, rentals tend to be higher density than houses that are owned. If there is a housing crisis, this seems like a desirable thing. Ex: roommates (yes, possible with a house, but less likely), etc.

same. i rent largely because i haven't prioritized buying. (i.e. the money i could have saved for the down payment went to accelerated student loan payoff, cars and fun stuff)

aside from the federal tax breaks and very high amount of leverage ($40k to get a loan on a $200k unit that you _might_ be able to resell at $300k to get into a larger $400k unit that you _might_ be able to resell at $500k to get into a larger $600k unit...), I never saw, and still don't see, the benefit of home ownership.

actually, that's not true. for people with families who need (or "need") stability, home ownership makes a lot of sense. you're going to be in the same town until the children reach maturity...might as well get a loan on a house since you're going to stay put for a while. cheaper than hoping that your landlord doesn't bump the rent up.

however, we are not having children, have moved three times in the last six years, and spend a lot of time traveling. i very much like emailing my landlord "hey, weird noise" and they bring in their contractor friends to look into it on their dime

i do hate how there is this sense that you should feel "bad" for not owning, i.e. renters are always pictured as troubled people in financial distress who don't have a choice but to rent.

My mortgage + insurance + taxes is a lower monthly payment than what my rent was at the time I bought my house. Compared to that same unit renting today, its several hundred dollars a month cheaper. It has over twice the square footage and a private garage. This is in a pretty big metro area, not the middle of nowhere.

One of the biggest benefit of owning is a hedge against housing inflation. Its not a perfect hedge, I do acknowledge. As property values increase my taxes go up, as housing materials increase in cost the cost to repair it goes up. But the amount my taxes will go up in a year is far less than how much I've been seeing rents shoot up.

You're also shouldering maintenance which is often not calculated well; the depreciation allowance the IRS allows for rental properties is a rough estimate but it's not perfect - it estimates that the property (house, not land) will be worthless in 27.5/30/40 years, depending on if you take GDS, ADS, or it was placed in service before 2018 - you usually want the fastest depreciation possible but there are reasons not to choose such, involving capital gains on sale, etc.

They're "small" expenses but if you track out the various things and divide them over the ownership period, they do add up.

E.g. - current house, here 5 years, so far: furnace and A/C, $9k, fence, $14k, landscaping and misc, $2k, tools and supplies, $3k, plumber and window repairs, $2k. So about $6k a year, double my taxes and half my mortgage again. And I haven't even hit the big ones (and didn't count appliances as those were "optional" purchases).

Owning is still a good idea for many, and has benefits, and renting will almost by definition be more overall, but it's not a given. You note the main advantage - stability. If you're on a fixed loan (whether it be 5, 10, 20 or 30 years) your payments are calculable years in advance and you get to pay much with tomorrow dollars, which are almost always worth less than today dollars.

But you do have to want to stay in the area for years.

Did you account for the opportunity cost of your down payment? If you chose to continue to rent, you could have invested your $100k or whatever down payment in the stock market for ~7% a year.

On the other hand, you have to count the mortgage interest as a cost but not the mortgage principal repayment.

The increase in valuation in my house far exceeds 7% annualized. Compared to index funds and other investments over the few years I've owned it's far outperformed any other "investment".

Obviously, this won't hold true for all time-frames, and I'm not even necessarily a fan of thinking of primary residences as investment vehicles, but if you're going to compare it for opportunity cost it's still not necessarily a home run comparison.

How much equity do you have in the house? 5%? More?

Due to house values rising considerably in the years we've owned, it's actually pretty high considering we're only a few years in. We only put 10% down but we were able to get rid of PMI in only a year because of home prices skyrocketing.

I have good news for you! How many rentals are available is closely controlled in most parts of the US. This is one of the things zoning accomplishes. It's possible that the outcome may differ slightly from what you want, however.

Rent controls are unfortunately very similar in key ways. They've been tried, and the results may not quite line up with what you might be hoping for.

> How many rentals are available is closely controlled in most parts of the US.

Technically true, but practically false. Yes, zoning exists in most of the US. And yes, most people have no trouble converting a region to residential zoning. I've known people on both sides, and most of the problems are the opposite - people who want to run businesses in a residential zone. I've yet to meet a single person who couldn't go the other direction.

There's a process to getting approval to build a house/apartment complex. You simply follow the process and get approval. Most of the US is not the Bay Area, Seattle or NYC.

The point I was attempting to make is that we have and use the tools to control the quantity of rental housing available. Using those tools has not made renting as cheap as owning. Those tools generally help accomplish the opposite. With that in mind, there's perhaps cause to question if "controls over how many" that yardstick suggested will accomplish their aim.

So yes, you're absolutely right, technically true. In practice, they fundamentally don't do what the user wants them to do because that's not what caps are capable of doing. The tools don't work that way.

When I bought my home 4 years ago my mortgage was ~10% more per month than the apartment I was renting. Looking at the apartment complex's website, it looks like the same apartment is now about 60% more per month than my mortgage.

In much of the US (read, in the Midwest where I am right now).. mortage monthly payment is indeed cheaper, sometimes a lot. And this is after taxes / repair issues.

Renting is very much a poverty trap where the poor with bad credit get poorer and worse credit.

Depends on where you live - this "renting is a poverty trap" only applies to certain places and depends on home values constantly increasing. If home values crash where you live then you spent years putting money towards a worthless asset.

> If home values crash where you live then you spent years putting money towards a worthless asset.

It's still a roof over my head regardless of how much it's worth. And more importantly, how much it's worth is completely irrelevant unless/until you want to sell. And if you do want to sell, and home values have crashed, then the next house you buy will also be cheap!

The OP is talking about a situation where it would be cheaper to rent your home in the future, than make mortgage payments on it.

Yes, but are we splitting the payments between principle and interest? In most cases, after a number of years, the rental cost easily exceeds interest + insurance + tax for the same size property.

Yes, it often seems the rental cost will be less than your monthly payments, but do realize that you lose all the rental cost, but not all your monthly payment.

Its simple to demonstrate scenarios where a loss in property value ends up being more expensive for the homeowners than renters in the long run. We had a crisis in 2008 because of this.

There are online rent vs buy calculators that you can use to generate these scenarios.

https://www.calculator.net/rent-vs-buy-calculator.html

Plug in negative appreciation for property values and watch how the comparison tilts.

Renting is always worth 0 as equity, so it's a total loss regardless.

* It guarantees you do not lose money if the home values around you drop

* It gives you a fixed monthly houseing cost. No "10k new roof" or "1k new stove" suprises hit you.

* If you are say, saving 50% vs buying, you can put this difference in an index fund. This would over 10 or 20 years potentially give you a LOT of money over buying.

Look, buying is mostly great. It's one of the biggest builders of wealth for most Americans. But from a purely numbers game, it's not so clear "rent is just losing money".

1. True, but housing prices rarely drop in desirable areas (usually where good jobs and schools are). If, for some reason, you decide to stay in a town with a dying industry, then yes, this is true.

2. So does a fixed-rate mortgage. Even better, refinancing a mortgage during a low-rate period (e.g. 2012, 2020) actually lets you reduce your payment, while contributing more to equity. How often do you have an opportunity to reduce your rent?

3. Saving 50% of what exactly? You can put the down payment into an index fund, yes, but remember than the house is an asset that gives you 5x leverage initially, assuming 20% down. You can't get 5x leverage at your broker, and even if you could, playing with 5x leverage on the stock market is insanely risky compared to real estate.

> But from a purely numbers game, it's not so clear "rent is just losing money"

It's pretty clear actually. They've compared retirees who rented all their life vs home-buyers. The difference in wealth was striking, a factor of 6x-7x if not more.

What's not clear is whether that trend will continue in perpetuity under the conditions of declining population.

So say global warming continues. Huge chunks of Cali aren't fit to live in. Salt Lake dries up. What happens to all of those home values?

Home values rising historically is good, but I don't think a clear win through all time. There is no instrinsic reason a house value should rise faster than inflation. You can always build a new house for cost X. Buying existing means that new house supply is too low or too costly.

I don't look at a house as an appreciating asset, that would be stupid. Market forces control the price, and those are predominantly out of your control.

But for what I've paid in rent over the years, I could have paid for entire dwellings. And had the freedom to fix and alter things per my desire.

> It gives you a fixed monthly houseing cost.

Renting is the opposite of a fixed monthly cost, since rents go up all the time. If you rent, you can't tell me what your rent will be in ten years. I can tell you what my mortgage will be, exactly the same as today.

> No "10k new roof" or "1k new stove" suprises hit you.

If these bother you, you can sign up for house maintenance insurance programs to give you a fixed monthly cost. I'd recommend against that since they make a profit off you, you're better off putting that money into an investment account and withdraw from there when you neeed it.

> No "10k new roof" or "1k new stove" suprises hit you.

New roof costs are pretty much never a surprise. You should know when you buy the house how much life is left in the roof and plan accordingly. If a natural disaster occurs that destroys your roof, insurance will cover it.

Appliance costs? Yeah, they are often surprises. Hard to find reliable appliances any more.

Oh, and it's hard to get a $10K roof these day :-)

> If you are say, saving 50% vs buying, you can put this difference in an index fund. This would over 10 or 20 years potentially give you a LOT of money over buying.

Yeah, I always wondered if I should do this analysis for my house, and I'd be curious on studies on how this would play out in most cases. For me, right from the get go the rent on a comparable house exceeded the monthly interest + tax + insurance (excluding principle). The tax benefits more than paid for all the maintenance costs. So the main questions would be:

1. How much would the down payment be worth in an index fund?

2. How much would the principle payments monthly in an index fund be worth?

I suspect that I'm ahead of the market significantly, what with all the crazy house appreciation (that alone is about 8x my down payment), and rents are quite high - easily increased by over 70% since I bought the house.

The real wealth building doesn't come within a generation from asset appreciation. That's just speculation, the market can screw you.

But once it's paid for, it's paid for. Now you just need maintenance and taxes, easier on a fixed income. And it's easier to build intergenerational wealth if one of your children doesn't need to blow money at all on rent or home purchase.

> * It gives you a fixed monthly houseing cost. No "10k new roof" or "1k new stove" suprises hit you.

When the new roof goes in, what happens to you as a renter? I'm pretty sure you still have to pull together 4k for moving/security deposit/first several months

It guarantees that you can be forced to move at a whim. Twice I've had to move, once during the school year, because the landlord died. And they'll steal from your security deposit. Good landlords are young great people. Corporations are scum.

This is true only if you place zero value on "having a roof over my head".

But renting also guarantees you will never have negative equity.

Negative equity with a roof over your head is better than on the street. Your equity going to zero is still cheaper than raising a family to adulthood in a rented place.

I agree there are lots of upsides to having a house. I definitely get some used car salesman vibes whenever someone tries to sell up the upsides of negative equity, though. Having no chance to have negative equity is pretty much unequivocally one of the few absolute advantages of renting. The other being (typically) lower transactional costs for short term occupancy.

Negative equity means little. So what if it's worth less when you sell than when you buy? Compare the net on that with the loss you take from renting.

Only a fool treats their dwelling as an appreciating asset anyway. It's subject to market forces.

Absolute statements rarely hold up when you shine a light on them.

That's sometimes true, but there are a lot of nuances to it.

I mean, in San Francisco or the Bay Area in general, renting is a ton cheaper than owning at current prices. People still buy, because it’s nice knowing your landlord won’t get the cheapest contractor that’ll drill into asbestos in your kid’s room when something happens.

That's never going to be the case because of equity. Of course government-owned housing can be sold for use rights only with no equity, but that's 'socialism' which Americans have been viscerally conditioned against.