The worst argument, in my humble opinion, about the age-old argument between buying or renting a home is that too many people are too focused on building great wealth via the purchase of a home. Yes, many have created significant wealth via their homes, but I think this should be the BONUS, not the FOCUS.
Almost every article I have read or opinion I have heard from 'experts' speaks to return on investment and how your money invested elsewhere has the potential to deliver greater wealth-building. Often the opinions come from money managers who benefit by annual commissions from managing your money. So here are some points I wish to reiterate:
1. No one can time markets. And yes, you may buy a home at a 'peak' but too often we have seen how the dips of the past were merely temporary. Yes, they did not last a few weeks, and some last for years, but in the sphere of real estate we should measure everything in lots of years considering most stay in their home for about 13 years, not 13 months.
2. Homes are not guaranteed to escalate in value. Over time, the worst case scenario is that a home's value escalates marginally or stays about the same. Most do not lose value over an extended period of time.
3. You have to live somewhere, so you are certain to have a monthly housing cost, whether rent or a mortgage, real estate taxes, insurance, HOA fee, etc.
4. A mortgage paid off over many years costs lots in interest. A home requires maintenance and repairs. Nothing is free. But once a mortgage is paid off you have EQUITY and no longer have a monthly mortgage payment. You don't have any equity after 30 years of renting or after 60 years, the full span of time we need housing in a lifetime.
5. Rents rise. Most landlords do not offer 10 year leases or even 5 year leases. Most tenants are not guaranteed a low rent for life. Most renters move more often and moves are costly. Even a 2% annual rent escalation becomes significantly more expensive over the decades.
So instead of the narrative questioning the levels of wealth you create (or don't) via home ownership, maybe it is time to re-phrase this and speak to EQUITY BUILDING. I would much rather have something to show for those housing payments in the form of equity at the end of several decades than rely on my investing skills while paying (rising) rent.
