Home Ownership or Rental?

When it comes to renting your home vs. owning, many people have long said that it’s always cheaper in the long run to own. Even if your mortgage payment is a couple hundred bucks more than rent, you get tax breaks. Plus, when you’re done paying, it’s YOURS. So it’s smarter in the long term.

But times are tight, and many folks don’t have the luxury of thinking “long-term.” And home ownership numbers have taken a hit. Despite historically low 3.7% interest rates…

The home ownership rate in the U.S. fell slightly from 66% to 65% during the first quarter of 2012 — the lowest in 15 years, according to the latest data by the U.S. Census. (It peaked at just over 69% in 2004.) SmartMoney.com

Basically, people with stable jobs and equity in their existing homes are buying new ones, but nobody is buying their old house. So there are a bunch of single-family homes being rented now…about 1/3 of all rentals.

So, while nationwide it IS still cheaper to buy rather than rent, there are a few places in the country where that formula is upside down, including:

  • Northern New Jersey: Mortgage is $529 higher than rent, with some of the highest property taxes in the US.
  • Long Island, NY: Same story.
  • California: Like, all of it. Has the greatest number of counties where it is cheaper to rent.
  • Seattle, WA: One place rents for $2000/mo, while a comparable place costs $4000/mo to buy – and that’s WITH a 20% down payment!
  • Honolulu, HI: I guess you could always live on the beach, right?

So, are you renting or owning? By choice? How about your friends and family? Let us know…and have a great weekend!

13 thoughts on “Home Ownership or Rental?”

  1. I’m thanking God I don’t live in any of those places. We live in a place where we can afford to buy rather than rent. I hated having to count on my landlord to have something done to the home we lived in. Because chances were, it was not going to get done. He didn’t care he didn’t have to live there.
    However I thank God we had a place to live. God provided even though we were ungrateful especially toward the end of our stay there.
    Now that we’ve owned our home we’ve had things done to our home as we’ve had the money knowing we’ll be able to enjoy where we live. It’s now a pleasure to come home in South Alabama. Plus it’s nice and warm outside. 😉
    All Praise and honor to my Lord Jesus!!!

  2. I have owned my house in Oklahoma for the last five years. When we moved in all our neighbors also owned their homes. In the past two years three of these houses have become rent houses with the average rent approximatly $500 more than an average mortgage payment. One due to forclosure (new owner turned it into a rent house), one being rented out by the same owner (who couldn’t find a buyer for his house), and one that was sold to an invester who wanted rental property in the area. Owning your house here is definatly the way to go if you are secure in this economy and can get approved, clearly not everyone can which is a shame because you really save a ton of money in the long run and have a place you can truely call home!

  3. i rent ,
    it is cheaper to own in the long run, but…. with the cost of upkeep and rising taxes and no big return in the job market it will balance out and may even be cheaper to rent sooner than we think .
    i think if you are financially secure ,it is an advantage to buy right now if you can . intrest rates will likely rise and the cost of a mortgage will rise as well . i think we as a nation are looking at a few more years of hardship with no realistic plan in place to bring back the millions of lost jobs.

    most friends and family own , but they want to sell because taxes are getting close to what a mortgage payment is or would be .
    folks need to keep in mind that if you lose your job and can’t pat your taxes then for 3 years then your home goes on the auction block and you lose all you have invested .
    the benefits of owning are that you can make changes and you can recoop your investment when your home builds equity and the markets rise again .
    on th other hand, i have a great landlord that takes care of our place within a couple hours of calling . i do know there are many landlords that let things go though .

    overall the article above is right , it depends on where you are located

  4. I bought my house 7 years ago with the thought of some cash from selling when I retire. It all started falling apart with the drop in house values. The investments I thought I made with new roof and bathroom in basement just became liabilities. My neighborhood in the last 3 years has cost a over half drop in value. The banks did not want to work with me because my house is underwater. So it went to foreclosure, and the bank bought it back at under half of what is owed. I have a great house in a area now rapidly falling down. Soon I move and work on repairing my credit that was excellent.

  5. Wow,
    All of these comments about owning your house sound great. Unfortunately after two divorces, unemployment, and four kids, my credit is not so good. My husband and I (we have been together for the last ten years) rent the house we live in (a blessing) but we would love to purchase a home. I want a house that is ours. I want to be able to paint or renovate without having to ‘ask’ someone elses permission, but with bad credit, this will probably never happen. It has taken ten years to upgrade my credit to ‘barely mended’. I think banks should take into consideration the time the renters have been in one house, and paid faithfully the rent and utilities there, when considering someone for a loan. My husband has better credit than I do, but my credit drags him down.
    I know many people that have tried to sell their homes and cannot find buyers, and I see many houses fall into the unsafe category because they have been vacant for so long. Why can’t the people who pay their rent, that is as much as a mortgage payment, take over payments on some of the abandoned homes before they are deemed unfit to live in?
    I live in Ohio, and most of my friends/family rent, because it is cheaper to rent than to purchase a home. My rent is almost, not quite, as much as a mortgage, but I know others who say their taxes and repairs on the homes they own are breaking them. That means there is a constant danger of the bank taking your home due to back taxes, or failure to pay, and that means even if I did own a home, it wouldn’t be mine, it ‘could’ still end up being the banks.
    Right now, this economy, I think it is safer to rent than take a chance on the bank foreclosing, due to unemployment, or loss of a loved one, or if bad credit ensues.

  6. You could live on the beach in Hawaii, the law sometimes makes it a bit difficult. Considering it’s one of the highest cost-of-living, among the states and homelessness is actually growing at a rate of two person per month.

    It’s hard to get a decent room to rent under $500, unless you know people around the area. Depending on interests rate, it does makes lots of sense to get a loan to buy a house, condo or an apt. The only drawback is you’re paying for your own utilities, as opposed to renting with utilities included (alot of rental properties offers these amenities).

    Hawaii is one of the more enjoyable and laid-back places to live in, but also one of the most expensive to endure.

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