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]

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. Landlords pass on the cost of PITI plus a profit margin to the renter. 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]

"People who rent and save vs. bying are typically renting much less space or worse amenities. "

This is the key point here, and a BIG reason why financially renting might make you better off. As recent owners often complain, the rent vs. own gap is high now. You're not going to rent insanely outside your means if you don't need it today, but you'll certainly buy one because you're trying to solve today for your future life. That's probably a few thousand dollars of a gap monthly, possibly even more once you account for home maintenance, taxes, insurance, renos, etc. The assumption is that you're then reinvesting that money into the market. Your quality of life might be "suffering" (from less space, worse amenities), but that's the financial trade off. [/quote]

The “key point” is something you and PP just assume to be true?

But so what?  Many people take a hit to their quality of life by buying vs renting in terms of commute and access to amenities.  (Eg can afford to rent where they actually want to live but can only afford to buy farther out)

There are always trade-offs.[/quote]

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