Home Ownership... Maybe Not the Best Idea

I’m a big believer in the American dream of home ownership. I’d like to have a place to get away from it all and live how I see fit (for example playing the drums naked). With housing prices being what they are, that dream has seemed distant for a few years now. I could afford a house in the suburbs, but a suburb does not satisfy my desires.

Given the financial crisis, particularly talk of overpriced homes, I feel that homes may become more reasonably priced, and I am glad. However, I read a great article on why renting makes more financial sense than owning a home, and I have to reconsider the options. As property values decrease, apartment prices will too. Rent is almost always cheaper than a mortgage, and even more likely to be cheaper than the cost of owning a home (mortgage, taxes, upkeep, increased utility costs, etc). The author notes that the government generates revenues from homes so they want people in homes. Ultimately, he says investing in stocks will provide a better return on investment so your money is better spent on stocks.

There’s also a handy little tool to help you decide when to buy vs rent. Based on my current monthly rent and the median home price in Austin, I’d do better to rent.

In the end, home ownership (like so many other decisions) is not about logic, it’s about emotion. Money lets me do the things that make me happy, so the happiness from owning a house may outweigh the negatives.