I was under the impression that this was actually fairly common in places with rapid house price appreciation. Which includes a good portion of the places where people want to rent. The main source of profit for the landlord is the capital appreciation rather than the rent, so they're willing to rent at levels that wouldn't be profitable if they weren't also planning on profiting from the rising prices.
In theory it wouldn't have an effect on the rental market, but in practice cash buyers are much more likely to be corporate land owners, who tend to have higher margins than the casual investment property owner.
https://fred.stlouisfed.org/graph/?g=1Kion
And then computed the annualized percentiles of growth over every 10 and 20 year period:
Percentiles 10 Year 20 Year
0.1 2.759994509 2.955813986
0.2 2.857204716 3.026836408
0.3 2.990680184 3.126358739
0.4 3.127881625 3.147020404
0.5 3.199826901 3.269223125
0.6 3.418119435 3.360219255
0.7 3.558537072 3.523213118
0.8 4.20459087 3.876319675
0.9 5.606452092 4.488515605
1 6.820735567 4.991026738
You're definitely right that they underestimate rent growth, at least if you're assuming that you should be making conservative estimates. Plugging some of these numbers in, I don't think this changes the overall conclusion of the post, but it does change the magnitude non-trivially so I think it's very worth considering. Thank you!
The calculators are useless if the data going into them is useless, but even if it perfectly reflected past national averages, that doesn't make it a great predictor of future local results. If you're buying a bunch of properties spread throughout the country and over time, it could be useful, but for individual choices it's probably not. Here's a great read on the uselessness of comparing a bunch of averages to individuals: https://www.goodreads.com/book/show/24186666-the-end-of-aver...
From a broad perspective, most investors don't rent property out at a loss, so in general it's going to be more expensive to rent, unless you own a property for a short enough amount of time that closing costs play a significant role. Even then, occupancy rates aren't 100%, so average rent needs to make up for that. On the other hand, the margins aren't super wide, so rent is still in the general ballpark of the price of ownership.
In the end, if you want to rent then rent, and if you want to own than own. The pricing difference isn't enough to make an uncomfortable living situation worthwhile. Do you prefer the control and long-term stability of owning your property over the effort it takes to manage it yourself? Then buy! Do you prefer the freedom of moving often and the convenience of someone else managing and maintaining your property over the ability to live somewhere indefinitely or chose how your residence is remodeled? Then rent!