lock+load wrote:
Tell that to someone who has seen the value of their home decrease 10-20% in the last few years and now needs to move. Many times renting IS the best option.
Too many people have been drinking the home ownership Kool-Aid for too long.
I wouldn't say too many people have been drinking that Kool-Aid, but that more have listened to the wrong advice. It is more of an example that the decision to rent or own should really be based on one's individual needs or wants instead of some advisor's pet advice. If one expects to live a very mobile life then rent might be the way to go. On the other hand, if one plans to be in one place for 20 years then owning might be the way to go.
Yes, home values have dropped recently but so has the stock market. For example, two years ago if one had $200,000 and needed a place to live that person could have bought a home for cash with that $200,000 or invested it and rented a place for, say, $1,000 a month. After two years that $200,000 place to live might be worth $170,000 now. After two years that $200,000 investment might be worth $130,000 and the person is still out the $24,000 in rent payments.
Playing with numbers but still one could have come out ahead in the real estate market these past two years by owning instead on renting.
I may be right. I may be wrong. But there is a lot of gray area in-between.