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Chuck Norris · 05-31-2010, 08:19 AM

Owning a home is something most people have to do since they have to live somewhere.

For most people, it's the association with owning. It's like you feel better than the person next to you that says they're renting.

The average person is not able to save their money in a reliable way so home ownership is the only way that some people can grow their net worth. This is why in BC, there are a lot of people home rich but cash poor.

Much of the money being spent these days is money that was taken from the equity of their home from the recent decade's price run up.

I know many people worry about their investments dropping but lets not forget that there were plenty of homes in the US that also dropped 50% and they are a long way from coming back to their previous prices.

Never buy any investment, stocks, mutual funds, real estate after there has been a huge price run up for years. During these times, the market loses logic and you'll likely be in for a small ride up with a huge ride down.

So is renting better than owning?

It's not a yes or no answer because there are things to consider.

Owning your own home gives you that forced savings plan, something some people need. There is also the mental state of having a place that you can call home for good. This becomes more important if you have a family.

Owning your own home has a lot of nice elements to it including bragging rights which makes people feel good.

Renting has it's great points as well.

At the end of it all, pricing is what determines if you're making a smart move. In the case of current pricing, most home ownership does not make sense and it's better to rent.

This is because we're likely to see a decline in prices, which means if you rent now and buy later, you'll be buying at a cheaper price. It is also because the price of rent is far cheaper than the price of ownership which also plays a large roll.

Many people continue to purchase at overstated values with the expectation the home prices will continue to go up. We've been at the tipping point of prices for a while. The only thing keeping prices up have been low interest rates along with external funding.

That party is coming to an end now as well so upwards movement is possible but you're betting with the odds not in your favor.

05-31-2010, 08:19 AM	#15
Chuck Norris Unauthourized Spammer Join Date: Jun 2005 Location: . Posts: 494 Thanked 64 Times in 20 Posts Failed 0 Times in 0 Posts	Owning a home is something most people have to do since they have to live somewhere. For most people, it's the association with owning. It's like you feel better than the person next to you that says they're renting. The average person is not able to save their money in a reliable way so home ownership is the only way that some people can grow their net worth. This is why in BC, there are a lot of people home rich but cash poor. Much of the money being spent these days is money that was taken from the equity of their home from the recent decade's price run up. I know many people worry about their investments dropping but lets not forget that there were plenty of homes in the US that also dropped 50% and they are a long way from coming back to their previous prices. Never buy any investment, stocks, mutual funds, real estate after there has been a huge price run up for years. During these times, the market loses logic and you'll likely be in for a small ride up with a huge ride down. So is renting better than owning? It's not a yes or no answer because there are things to consider. Owning your own home gives you that forced savings plan, something some people need. There is also the mental state of having a place that you can call home for good. This becomes more important if you have a family. Owning your own home has a lot of nice elements to it including bragging rights which makes people feel good. Renting has it's great points as well. At the end of it all, pricing is what determines if you're making a smart move. In the case of current pricing, most home ownership does not make sense and it's better to rent. This is because we're likely to see a decline in prices, which means if you rent now and buy later, you'll be buying at a cheaper price. It is also because the price of rent is far cheaper than the price of ownership which also plays a large roll. Many people continue to purchase at overstated values with the expectation the home prices will continue to go up. We've been at the tipping point of prices for a while. The only thing keeping prices up have been low interest rates along with external funding. That party is coming to an end now as well so upwards movement is possible but you're betting with the odds not in your favor.