Renting makes more financial sense than home ownership.

[calteacherguy]

Stocks vs. Houses: Returns
Shares of businesses return 7% a year over long time periods. I'm subtracting for inflation, gradual price increases for everything from a can of beer to an ear exam. (After-inflation or "real" returns are the only ones that matter. The point of increasing wealth is to increase buying power, not numbers on an account statement.) Shares have been remarkably consistent over the past two centuries in their 7% real returns. In Jeremy Siegel's book, "Stocks for the Long Term," he finds that real returns averaged 7.0% over nearly seven decades ending 1870, then 6.6% through 1925 and then 6.9% through 2004.

The average real return for houses over long time periods might surprise you. It's zero.

Shares return 7% a year after inflation because that's how fast companies tend to increase their profits. Houses have their own version of profits: rents. Tenant-occupied houses generate actual rents while owner-occupied houses generate ones that are implied but no less real: the rents their owners don't have to pay each year. House prices and rents have been closely linked throughout history, with both increasing at the rate of inflation, or about 3% a year since 1900. A house, after all, is an ordinary good. It can't think up ways to drive profits like a company's managers can. Absent artificial boosts to demand, house prices will increase at the rate of inflation over long time periods for a real return of zero.

more here....http://www.smartmoney.com/home/living/index.cfm?story=rent

I don't think there is anything wrong with owning a house, and owning a home makes sense for a lot of people. However, it is a myth that owning a home ALWAYS makes more sense than renting. It's a myth perpetuated by the housing industry, and it's a big part of why so many people got in over their heads. So, I thought I'd provide as alternate point of view. I think this article articulates the case for renting very well.

[eridani]

1. Karl Marx on the difference between use value and exchange value is helpful here

If you think of a house as an ATM, it isn't a very good investment. If you think of it as shelter, it looks much better. Just like renting shelter, only if you stay there long enough you eventually get to stop paying.

[napi21]

2. I think there's much more to it than that. If you buy a house at

a price you can afford, get a conventional mortgage so you know your payment will not change during the life of the loan, and maintain your property, f you uaually are ahead of the money game.

I cn tell you that we built our first house in 1965, lived in it for 23 years, sold it when I was relocated out of state, did the same thing twice hence, and in 2000, we were able to buy our current house by paying cash. If we had rented all those years, that simply never would have happened.

[sandnsea]

3. Until you're 50, disabled,

and rent keeps going up and up and up and your income is going down, down, down because you're too sick to work.

Renting is stupid. Most people simply don't have the income for rent and the kind of investment homeownership brings.

[calteacherguy]

4. Saying renting is stupid is stupid.

Neither home ownership nor renting is stupid. It all depends. I'm suprised you would make such a foolish statement.

[KharmaTrain]

5. So Let Me Get This Straight...

OK...so if I had stayed in my townhouse and paid the $1200 a month rent for the past 14 years...that is $200,000 plus in rent...and that somehow that is better than my current home, inwhich has more than doubled in its value (even with a depressed market), continues to build equity and provided me with a valuable tax deduction. It also made me a stronger member of the community as a "land holder" I had a bigger interest in the quality of the schools and roads and local services. And renting would be better?

Renting has its advantages...such as for those who are in jobs where they constantly. But home ownership has saved me a lot of money as well as creating a long term investment that probably will benefit my children...just like what happened with my parents. The home they purchased in the 60s increased in value 5 times and that money went to help finance several college educations.

[BlooInBloo]

9. Some renters are just looking for any kind of "ha ha I told you so" to get past....

... their feelings of inferiority towards owners. There's no need to treat them seriously.

[SoCalDem]

6. Home ownership for me, means

I can have pets without having to ask permission.. if my kids broke something, I didn't have to worry about a landlord getting in my face.

We have never bought houses as an investment.. For us, it's a roof over our heads..and if at the end, it has appreciated..well so be it :)

[Hideboh]

7. If you rent a flat for 50 years, it'll cost you something like $300K

and you'll get nothing. I call it stupid.

[Momgonepostal]

8. I think it CAN make more sense, particularly in the short run

Over the long haul, though, I think owning is almost always a better deal.