Rent vs buy in the US

[deborah]

Today I saw the attached graph in The Economist. It seems that the best strategy in the USA has changed from buying to renting over recent years. Thought you might all be interested.

[nereo]

Mortgage rates have gone from under 3% to over 7% during these two periods. At the same time entire markets were limited from raising rents for much of the pandemic and landlords are often limited on how much they can raise rents in a given year.

It will be interesting to see how trends change (or not) over the next 1-2 years

[BrianT]

It'll depend on your situation. But isn't this always the case? 🤣

[Radagast]

That looks to be the case for the past couple years. I can certainly say that we wanted to buy, but just decided to rent a nice place instead. We can rent the same house at half the monthly payment that it would take to buy, with the side benefits of 0 down and 0 maintenance. Rent is notably lower then interest alone for an identical house for decades. Of course our area is likely on the higher end and there will be exceptions, but circumstances favoring buying are really outliers right now.

[penguintroopers]

Looking closely at that graph its comparing a median house vs a 2 bedroom apt. Those are totally different housing options and no wonder the majority of the map favors renting.

Even with that, its obvious that the math has changed a lot with interest rates, but I feel like this map is very disingenuous.