Reply to What if we just rent for the long haul...

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]

When an overwhelming majority, staggeringly overwhelming majority, of higher income, higher net worth people own, not rent, that tells you something. Not a coincidence. 
[/quote]

It tells me they’re not too concerned about what the optimal financial move might be, because they can easily afford to own and they want to own so who cares?

What does it tell you?[/quote]

Not PP. There is no free lunch. [b]Landlords pass on the cost of PITI plus a profit margin to the renter. [/b]People who rent and save vs. bying are typically renting much less space or worse amenities. I don’t think housing is a great investment, but you do have to live somewhere and pay for shelter. Also, a house is bought on leverage so for a 400k down payment the house has to appreciate by 30k a year to beat the market long term. And yes $2M houses have  appreciated a lot more than 30k annually. I consider PITI the sunk cost of providing for shelter, no different than rent. [/quote]

If the landlord of the SFH bought during 3% mortgage rates, he/she can charge rent that's a lot lower than what you will pay to buy using today's rates. In the neighborhoods I'm looking at, you can rent a home that is worth around 2M for 10K a month. The PITI for a 2M house is a little more than 13K, which means I save 36K in a year from just renting than owning. Sure your 2M house might appreciate more than 30K this year, but my 400K down payment pretty much earned 30K just in 2024 YTD in the stock market. When you include the 36K in savings, it's a no brainer. That's why, right now, it's better to rent than to buy.

I find it odd that posters here think that people won't be able to help themselves but to spend the 36K rent versus mortgage difference on trivial things, rather than to invest it. Maybe you're right, but that person probably never had a shot at saving 400K for the downpayment anyways. And if you are the type of person who could save up 400K, you probably can figure out how to use 36K/year in annual savings effectively.[/quote]

Some people love to reduce everything to pure numbers, doesn't he? One again, you are demonstrating short term thinking. A year from now interest rates could double. Or they could be half today. The numbers then change enormously. But it's too late for you.

By the way, 10k rent versus 13 PITI isn't quite the same. Some of the 13PITI is going to the principal. Remove the portion going to the principal then the gap isn't so large. Then next year that 10k rent could be 12k! Then in a few years it'd be 15k while the PITI is only 13.5k. And the 2M house could now be worth 2.5. Then you have to move and have to pay the moving costs.

Renting does gives you great flexibility. But it also gives you instability. If it works for you, psychologically, stay a renter and be happy. In fact, it sounds like you have the luxury of affording to be a renter. [/quote]

There is no 10K Rent vs. 13K PITI in desirable school districts. There is so little inventory for buying that people like OP are clamoring to rent. Plus the biggest advantage of the PITI is not even the  principal pay down, it's the TAX DEDUCTION which a renter can't get. There is at least a $2k a month tax break that the buyer is getting on that PITI.[/quote]

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