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Is It Really Better To Rent Than To Own a Home Right Now?

You may have seen reports in the news recently saying it’s better to rent right now than it is to own your home. But before you let that impact your decisions, you should understand what these claims are based on.

A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the methodology behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio.

But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:

“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”

The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the net worth of the average homeowner and the average renter (see graph below):

Is It Really Better To Rent Than To Own a Home Right Now? | Simplifying The Market

So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.

Bottom Line

If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.

Carrie loves people and numbers! Carrie has worked in financial services since she graduated from Iowa State with a degree in Finance. She enjoys connecting with new people and developing relationships to foster business and promoting other people. She is an active runner, golfer, enjoys reading, traveling, family, friends, meme sharing, comedy, anything Warren Buffett related and following the markets and investing. Carrie is happiest surrounded by family and dear friends including her boyfriend Mike and his two children most likely laughing or telling stories .

Carrie is also an adult living with Cystic Fibrosis – diagnosed when she was three months old. Cystic fibrosis is a progressive, genetic disease that causes persistent lung infections and limits the ability to breathe over time.

In people with CF, mutations in the cystic fibrosis transmembrane conductance regulator (CFTR) gene cause the CFTR protein to become dysfunctional. When the protein is not working correctly, it’s unable to help move chloride — a component of salt — to the cell surface. Without the chloride to attract water to the cell surface, the mucus in various organs becomes thick and sticky. In the lungs, the mucus clogs the airways and traps germs, like bacteria, leading to infections, inflammation, respiratory failure, and other complications. For every loan I close with Clear Mortgage, I will be donating $200 to the Cystic Fibrosis Foundation, Iowa Chapter. Reach out and apply now!

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