Monday, May 23, 2005

Renting is Better than Buying

One of the problems with renting, goes the conventional wisdom, is that, after taxes, it is more expensive to rent than to buy. However, right now, the housing bubble is turning conventional wisdom on it's head. The story linked in The Housing Bubble Blog asks "why buy a home when you can rent for half the cost? ... [W]ith home prices soaring and rents staying flat -- and with the Federal Reserve expressing concern last week over signs of a national housing bubble -- there may be some good economic reasons to consider renting instead of buying."

2 comments:

pck said...

wth? i tried to leave a comment disputing the bubble theory.

argh!

the school of thought is that outside certain areas, e.g. boston, san francisco, where the prices are inflated; buying a house to live in (not speculation) is a safe investment.

Chintan K. Amin said...

pck, I agree with you. However, in the major metros, there is a bubble. As that is where an increasing number of people want to live and an increasing concentration of wealth is, a bubble there may have disproportionate effects.