^

Pretty much, for the most part it has been cheaper to buy vs rent for a very long time now with exception to last couple years but that will work itself out. I retained about 67% of what I spent payment wise on my first home when I went to sell & if I were to sell my current home I would actually get more than 100% of the payment back over last 6 years due to one paying overage & two appreciation. I just roughly broke down the numbers from my 15 years of personal ownership and I'm retaining a little over $1500/mo of what I paid in mortgage. Not bad.

I'd guess the hidden costs of home ownership. Insurance, property tax and repairs are expensive. Rent has that all wrapped into one.

Yea but the hidden expense of not owning & paying down an appreciating asset simultaneously is much more expensive than the upfront costs of ownership. It just takes a little more discipline.

Percent of US households that live in a house they own is a little over 65%.

^

The government literally helps you make a good chunk of the payment. Mortgage interest & property taxes alone are a huge write off. Renting for anything more than a couple years is absolutely detrimental to wealth creation in most cases.

You can also write off various other improvements & upgrades as well, given their is no capital gains on a primary residence until after $250k or $500k if married that means all of the money & investment into the property grow tax free. This is huge.
The standard federal deduction is such that it exceeds most deductable expenses for the majority.

There are only tax deductions for home ownership if you itemize your deductions. 90% of tax payers take the standard deduction, and see no tax benefit from owning a home.

And while rents go up, I would argue that a mortgage payment does as well. While the principal and interest are fixed, taxes and insurance are not. Insurance rates have increased nearly 40% since 2019, and taxes can increase substantially when a home is sold for far more than it previously sold for. An escrow shortage compounds the issue and (temporarily) raises the payment even further. I know multiple people that have been forced to sell because they simply can't afford the increase in their monthly payment.

I am fortunate enough that I could afford to purchase a home if I wanted to. But I have no idea how the average family earning $55k a year is supposed to be able to do it.
True. Taxes and insurance do raise the mortgage payment. And lately it can be noticeable. For the last few years of us making a $1200 a month house payment we didn't qualify for itemized deductions. For the few years before that we barely did and it saved us very little in taxes. I've owned a house for 45 of the past 46 years but I can understand the reluctance to be a first time buyer now.

Yea but the hidden expense of not owning & paying down an appreciating asset simultaneously is much more expensive than the upfront costs of ownership. It just takes a little more discipline.

I'm not saying it doesn't make sense on paper but based on the fact a ton of people in America have zero in savings makes it hard to come up for unexpected expenses.

The standard federal deduction is such that it exceeds most deductable expenses for the majority.

yep it will be around 30k for the 2025 tax year for a married couple ..

but it is currently slated to go way way down in 2026 ..

I'm not saying it doesn't make sense on paper but based on the fact a ton of people in America have zero in savings makes it hard to come up for unexpected expenses.

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and eventually trade up.

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and eventually tradeup.

I don't disagree. But it also seems that home buying is an issue in many countries besides America. I'm sure people smarter than me study this. I would guess it comes down to supply and demand, wages, rates, inflation, etc...

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and then tradeup.

Personally I think you're overestimating how many of the "younger generations" are "driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.". I am someone who bought the cheapest (albeit new) car I could 9.5 years ago and is still driving it, never gone out of the country on vacation, and up until recently never carried a balance on my credit card (and only do now due to necessary expenses) and own my home own (currently on my second house) so this isn't defensiveness on my part.

I was lucky enough to get a decent home at a decent price, cash out year later, upgrade location. If I were in the same position now as I was when I bought my first house years ago I don't think I'd be able to do it again. Obviously there are people at all ends of the "age spectrum" who overspend and undersave and are more focused on keeping up with the Jones rather than planning ahead, but I don't think its as widespread among the younger generations as you seem to perceive.

Other countries are an entirely different matter. Much of what makes America great is our entire economy is set up where almost anyone can own their own home (and car). Go elsewhere and that is not the case.

There are no shortcuts to home ownership (besides rich families who help): You have to save money and be willing to start low on the home totem pole, then continue to work your way up.

Of course it's different in very expensive markets but OKC is the other end of that spectrum and it's very easy these days to move anywhere in the U.S.

Personally I think you're overestimating how many of the "younger generations" are "driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.". I am someone who bought the cheapest (albeit new) car I could 9.5 years ago and is still driving it, never gone out of the country on vacation, and up until recently never carried a balance on my credit card (and only do now due to necessary expenses) and own my home own (currently on my second house) so this isn't defensiveness on my part.

But you own a home.

We're talking about people claiming they can't and almost none of them fit the lifestyle you have lived, otherwise they could own, too.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and eventually trade up.

Because the math doesn't support this at all?


The median house of 1960 would cost just $104,619 in 2020 dollars, far below the actual cost of $240,500, meaning housing costs have increased by 129%.

Median household income has only grown by 39% in that same time period, from $49,232 (2020 dollars) in 1960 to $68,703 today.


It is literally both more expensive to afford a home now, and harder to save money. All factors are working against a person today buying a home than compared to their parents and beyond.

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

My parents bought their first house for $5000 for in 1947-8ish. In 1959 when I was 2 they bought the house they died in for around $8000. A considerable amount for the time but not like home prices now adjusted for inflation. Only dad worked, as a printing pressman, and as a kid we still had extra money. Mom eventually went to work part time as an LPN in the late 60s and with that we travelled and bought a lake house at Eufaula and a boat, and dirt bikes. That cannot be done now on 2 common workers pay.
I bought my first house in 1978 for $8k. I didn't stretch at all to buy it. I did very little to it. Sold it a few years later for $15k and bought house #2 for $20k. Didn't do a whole lot to it and sold it for $33k. And so on. I didn't have to skimp or not live the lifestyle I wanted to eventually have a nice house in a nice neighborhood. All along the way I had boats, race cars, motorcycles, went on ski trips, ate out way too much, etc, etc.
It's not that way now. Things are way harder now. Especially for a generation that isn't used to being told no.

almost none of them fit the lifestyle you have lived

I'm disagreeing with this portion. I don't have some national survey results or anything, but anecdotally (which I would consider more valuable than any anecdotal perspective you have as I'm closer to the demographic being discussed) when people my age or younger are not able to buy a home it is not due to living large and wasting cash on luxury. Like I said, if I were 10 years younger and working as a Senior Manager a movie theatre right now with a family of four (which were the conditions I had when I bought my first own) and living the lifestyle I lived then (which was generally below my means), I don't think I could buy that home or a similar home.

Like I said, I don't have any objective data ready at hand, so agree to disagree. Just wanted to get my perspective out there.

I think we can both say that the last couple of years have made it significantly harder (in the short term) and that nothing has really changed at the same time. Market conditions change with economies but the sacrifices required & general trajectory aren't any different. There are going to be times when it is easier than others. We had an extraordinary period of ultra low rates & housing prices here for well over a decade. Now that we are somewhat catching up to big cities plus last few years it's a lot harder. I always try to educate people on opportunity cost, if they can understand things from that perspective it makes a lot more sense.

I'm a bit of a unicorn with how I've always approached personal finance & I think as I've watched peers and younger siblings and generation there is less and less financial discipline. I can attribute most of what I have now to a lot of sacrifice and not living like everyone else when I was in my 20's. Even when I was low income I still managed to put together a decent net worth over the years but it took consistent disclipline and I started really young compared to most. Even now that I earn and have significantly more for the most part I live under my means. Way under many people I know that aren't in nearly as good of a spot. It just comes down to short term vs long term decisions.

Yes Tik Tok is what it is (and I refuse to have one myself), but these are good very high level videos explaining why today's situation is "different." I can't find the best video I've seen that explains all the math at a pretty granular level (granted, I recognize this is all very high level and doesn't account for geography, etc.) but these do a decent job. Despite being a millennial, I historically agreed more with the POVs of some of what I'm assuming are members of older generations posting on here that it's largely a matter of prioritizing expenses and lifestyle, but my perspective has definitely changed. While, yes, it is possible for younger people to prioritize homeownership (and I'm in the privileged position to have done so), it is also true that it is materially harder for people of my generation to do so than in the past and the math bears this out (again, at a high level).

https://www.tiktok.com/@fmsmith319/video/7277916706507377962?lang=en

https://www.tiktok.com/@fmsmith319/video/7313953117039807790?lang=en

I think we can both say that the last couple of years have made it significantly harder (in the short term) and that nothing has really changed at the same time. Market conditions change with economies but the sacrifices required & general trajectory aren't any different. There are going to be times when it is easier than others. We had an extraordinary period of ultra low rates & housing prices here for well over a decade. Now that we are somewhat catching up to big cities plus last few years it's a lot harder. I always try to educate people on opportunity cost, if they can understand things from that perspective it makes a lot more sense.

I'm a bit of a unicorn with how I've always approached personal finance & I think as I've watched peers and younger siblings and generation there is less and less financial discipline. I can attribute most of what I have now to a lot of sacrifice and not living like everyone else when I was in my 20's. Even when I was low income I still managed to put together a decent net worth over the years but it took consistent disclipline and I started really young compared to most. Even now that I earn and have significantly more for the most part I live under my means. Way under many people I know that aren't in nearly as good of a spot. It just comes down to short term vs long term decisions.

Try being single and no kids until the age of 36 like I did. Still no kids but I did have 2 step kids for 8 years. It is a big reason I have the assets I have today. I know it's not for everyone but it was for me. I'll add that when you do finally get in your forever house and pay off the mortgage it is a great feeling.

I don't disagree. But it also seems that home buying is an issue in many countries besides America. I'm sure people smarter than me study this. I would guess it comes down to supply and demand, wages, rates, inflation, etc...

I would say it comes down to personal responsibility (or lack thereof). If you work hard and make good choices, you can own your own home. Yes, it may take some initial sacrifices, but it will be worth it long term.

At any given point in time, it can be harder to buy a home, especially since we are coming off ridiculously low rates that lasted a long time.

Think 7% is high? Rates were at 10%+ from 1975 to 1990, and got as high as 18%.


It still doesn't change the fact that given any current economic situation, you have to save for a downpayment then be prepared to lower your expectations and put in some work so you can get your foot in the door, then all the various forces -- inflation, high rates, high home prices -- are canceled out because you are already in the market.

And if things in fact are increasingly hard on first-time homeowners, you can either complain or come up with a plan to get in ASAP because waiting on the sidelines always makes it worse.

Yes Tik Tok is what it is (and I refuse to have one myself), but these are good very high level videos explaining why today's situation is "different." I can't find the best video I've seen that explains all the math at a pretty granular level (granted, I recognize this is all very high level and doesn't account for geography, etc.) but these do a decent job. Despite being a millennial, I historically agreed more with the POVs of some of what I'm assuming are members of older generations posting on here that it's largely a matter of prioritizing expenses and lifestyle, but my perspective has definitely changed. While, yes, it is possible for younger people to prioritize homeownership (and I'm in the privileged position to have done so), it is also true that it is materially harder for people of my generation to do so than in the past and the math bears this out (again, at a high level).

https://www.tiktok.com/@fmsmith319/video/7277916706507377962?lang=en

https://www.tiktok.com/@fmsmith319/video/7313953117039807790?lang=en

Millennials are 28-43 so I don't necessarily agree with that because things were pretty easy until 2-3 years ago so even mid-late 20 year olds had good opportunities. I'm also a millennial and for a decade we had arguably the easiest conditions to buy/own. No longer true after 2022 though to your point. We are at generationally low affordability since mid 22 and may not get much if any easier.


I would say it comes down to personal responsibility (or lack thereof). If you work hard and make good choices, you can own your own home. Yes, it may take some initial sacrifices, but it will be worth it long term.

100%


At any given point in time, it can be harder to buy a home, especially since we are coming off ridiculously low rates that lasted a long time.

Think 7% is high? Rates were at 10%+ from 1975 to 1990, and got as high as 18%.


It still doesn't change the fact that given any current economic situation, you have to save for a downpayment then be prepared to lower your expectations and put in some work so you can get your foot in the door, then all the various forces -- inflation, high rates, high home prices -- are canceled out because you are already in the market.

And if things in fact are increasingly hard on first-time homeowners, you can either complain or come up with a plan to get in ASAP because waiting on the sidelines always makes it worse.

So much this. I wish there was a way to make people understand that. Especially after the last few years, so many people chose to wait on conditions they were just certain would be more favorable only to now realize the very unfortunate reality.

There has been a lot of good information posted!

So much this. I wish there was a way to make people understand that. Especially after the last few years, so many people chose to wait on conditions they were just certain would be more favorable only to now realize the very unfortunate reality.

Show them this graph.

Prices do nothing but go up, with the only exception the once-in-a-lifetime 2008 mortgage mess. And even that didn't last long.

HTTP://www.okctalk.com/images/pete/homeprices1.jpg

I probably should keep something like that in photo form I can easily message out or to include with a buyer presentation. Just like the stock market. It almost always seems the most expensive when you're buying unless it just happens to be one of the down turns and all the better if you can afford then but as you look back it was almost always the cheapest. The best time to buy was always a few years ago. As long as you stay in the market linearly for several years you'll be just fine & sometimes can turn around and make much quicker move ups that wouldn't have been possible before.

I guess it's never too early to start looking ahead.

Many people have been telling us they would wait until after the election/change was made to buy. Here we go!

Will be interesting to see what happens, most will feel more certain economically I think at least from a psychological point of view but will be surprised to see rates going even higher. Hopefully this is a temporary move but the bond markets are pricing in tariffs which is leading back to higher mortgages last few weeks as they anticipated the win.

One thing is certain though all this volatility right now is creating some opportunities for buyers! Once things stabilize/look better the deals won't be as good.

https://x.com/KobeissiLetter/status/1854175237530648640

^

Yea rent is a major problem compared to the numbers a few years ago, all the more reason to buy ASAP. It's hard to get stable financially until you have a homestead IMO.

Single family rentals are poised to do great for years to come, the demand is very high and should remain & prices have gone way up. I feel like we're about to see a lot more investor activity. I had a couple buyer inspections going on this morning & one of my regular guys is also a long time investor said he's planning to pick up at least 4 next year now and basically go on a buying spree.

I guess it's never too early to start looking ahead.

Many people have been telling us they would wait until after the election/change was made to buy. Here we go!

Will be interesting to see what happens, most will feel more certain economically I think at least from a psychological point of view but will be surprised to see rates going even higher. Hopefully this is a temporary move but the bond markets are pricing in tariffs which is leading back to higher mortgages last few weeks as they anticipated the win.

One thing is certain though all this volatility right now is creating some opportunities for buyers! Once things stabilize/look better the deals won't be as good.

And, regardless of interest rates, insurance rates will continue to escalate as coverage will be harder to get and rates higher due to escalating weather episodes. It is the total bill that matters.

^

No doubt, it's all only going to get more expensive from here.

https://www.youtube.com/watch?v=ZAy7ZTIfFLw

This house right down the street from me was a rental for quite a few years. The people renting it moved out about a month ago. It had a for rent sign in the yard for the last month and is now for sale. It is a perfect example of a starter house for $150K. Looks like it last sold in 3/2021 for $101K. Taxes on it last year were only $1436. In this neighborhood it will sell very fast.

https://www.zillow.com/homes/4301-N-Libby-Ave-Warr-Acres,-OK-73122_rb/22036563_zpid/?

This house right down the street from me was a rental for quite a few years. The people renting it moved out about a month ago. It had a for rent sign in the yard for the last month and is now for sale. It is a perfect example of a starter house for $150K. Looks like it last sold in 3/2021 for $101K. Taxes on it last year were only $1436. In this neighborhood it will sell very fast.

https://www.zillow.com/homes/4301-N-Libby-Ave-Warr-Acres,-OK-73122_rb/22036563_zpid/?

I'd like to see more houses this size built. Only change being a 2 car, vs 1 car garage. My house is 900 sq ft, plus a 2 car garage. I'd like something a bit bigger, but all told I'm getting by just fine. Many single people and married couples with no or 1/2 kids would get along just fine in a house this size. It would help out with affordability.

This house right down the street from me was a rental for quite a few years. The people renting it moved out about a month ago. It had a for rent sign in the yard for the last month and is now for sale. It is a perfect example of a starter house for $150K. Looks like it last sold in 3/2021 for $101K. Taxes on it last year were only $1436. In this neighborhood it will sell very fast.

https://www.zillow.com/homes/4301-N-Libby-Ave-Warr-Acres,-OK-73122_rb/22036563_zpid/?

Funny coincidence: That house is 4301 N. Libby.

When my family first moved to OKC from Milwaukee in 1962, we rented 4309 N. Libby for a year (six of us in a 2-bedroom house) before buying right next to Rollingwood.

That house is on the corner of 42nd and Libby so it's a big corner lot too. . As you go north on Libby from that house the houses get smaller and are not brick but wood siding too. Plus it's Warr Acres and not OKC. The other side of 42nd st is OKC.

I'd like to see more houses this size built. Only change being a 2 car, vs 1 car garage. My house is 900 sq ft, plus a 2 car garage. I'd like something a bit bigger, but all told I'm getting by just fine. Many single people and married couples with no or 1/2 kids would get along just fine in a house this size. It would help out with affordability.

I think something around 14-1500 sq ft. 3 bedrooms, 1 3/4 bath 2 car garage should be built for starter homes.. But there is probably less money per unit to be made by builders for that size house. The problem with 1 car garage houses is you get a 1 car driveway and that is a problem with multiple cars. My first house I talked about earlier in this thread was just a few blocks from this house. It was 1160 sq ft 2 car garage and it would have been so much nicer with just a couple hundred more sq ft. That could have moved the washer and dryer hook ups from the garage to inside the house and made the kitchen/dining/living area a little bigger. I had to knock a wall out between the kitchen and liking area to make adequate room for a dining table.

This argument becomes increasingly interesting to me every year. I will make these points in favor of renting:

1. Substantially more important to your financial health in the long run than owning a home is increasing your income (and I'm a medium to long term sustainable manner). To this end, if you are only renting then picking up and moving location is much easier when renting. Now, if you have something anchoring you somewhere advantageous to ownership, this isn't an argument in your favor. BUT, the flexibility can't be overlooked for wage growth.

2. Renting is more dependable from a pure numbers perspective in most 3-5 year periods. You can count on it increasing a decent amount between 5-10 years. Again, flexibility and short term benefits can't be overlooked.

3. Depending on COL in your area, the savings on rent vs. ownership can tilt heavily in favor of renting and, if you are anchored to such an area, renting forever may make the most sense.

I kind of see the math like this:

Consider, Interest + Taxes + Insurance (ITI) --vs.-- Rent

If ITI is ≤110% of rent, it's exponentially harder to justify renting if that ratio starts dropping under 92% (think closing costs against a quick sale). Up to 110% is potentially over leveraged, but likely corrects itself within 5 years.

If ITI is way higher than Rent (say, 125%+), the ownership starts to become questionable. You could always reinvest the difference in the stock market and likely make some serious returns that likely well outpace real estate.

For most situations, owning does actually end up being cheaper than renting--especially if you're over one bedroom. When was the last time renting actually cost less than a mortgage payment? Seems like I remember rentals used to be bought either with cash or heavy down payments, but now it seems like most rentals have full mortgages on them, so landlords need to charge the entire mortgage payment, plus upkeep and profit.

In most scenarios it's cheaper to buy vs rent regardless of the rates & payments so long as you're going to stay I'll just say a minimum of 2-3 years to break even. Sometimes it's quicker than that but anything beyond and your usually making a profit. I can trace back my 15 years of ownership to even 5 year blocks and it's staggering the difference in net worth vs renting even when I first started out. Now I can connect the dots back & know I recoup about $1500/mo long term of mortgage payment looking back at both realized & unrealized gains from sale/equity appreciation.

For most situations, owning does actually end up being cheaper than renting--especially if you're over one bedroom. When was the last time renting actually cost less than a mortgage payment? Seems like I remember rentals used to be bought either with cash or heavy down payments, but now it seems like most rentals have full mortgages on them, so landlords need to charge the entire mortgage payment, plus upkeep and profit.

My current rent on my domicile is ~60% of what a 30 year fixed would likely be, but my landlord isn't all levered up.

In OKC no doubt owning is cheaper than renting. Do unless you're leaving in the next 5 years, probably worth buying...this was ESPECIALLY true before the oandemic

Yea it wasn't even close pre-pandemic, the monthly mortgage payments were often times cheaper than renting and that's before even taking into consideration the massive amount of other benefits that come along with owning.

It's been more difficult since '22 when you look at the monthly payments but it's still cheaper than renting long term. Rent prices went way up along with home prices so that missed equity + paying down mortgage is still cheaper than the alternative. I highly doubt most people are taking any savings difference & investing for the the long term to beat housing.

Who on earth has ever put aside hundreds of thousands in savings by renting??

Yet, almost everyone I know has that sort of equity in their home.


A home is like a forced savings account. Even if the costs are higher in the short term (which is arguable, outside a down payment), you always have something significant to show for all those years of payments.

Show me someone who has a decent amount of assets and I'll show you a homeowner and probably someone who owns additional property as well.

^

Exactly, it’s financial discipline more than anything. There are no other options once you become a homeowner, at least that’s how I’ve always looked at it. The whole cost comparison vs renting really is silly given the true cost of not owning for anything other than a short duration.

When you rent, you are totally at the mercy of what a landlord charges, which is ever-escalating.

As opposed to entering into a 30-year fixed mortgage rate and you can even refi if rates become more favorable. And the argument about rising insurance rates is silly. Again, the landlord is just going to pass that cost on to a renter. As a homeowner, you can shop around, change your coverages, etc.

It's the same with property taxes. Your increases are capped as a homeowner unless you buy a new place. But if your landlord sells -- which they often do -- then renters are going to pay for the big jump in taxes.


For the life of me, I don't understand how anyone can think there is a financial advantage to renting vs. owning unless you plan to move every couple of years for the rest of your life.

Plus as a homeowner you can improve your living conditions like remodeling a kitchen or bathroom. Any improvements just add to the value and your equity in the property. That is hard to do in a rental. My first house I removed a wall to make the house better. The house I described above went from 101K to 150K in 3 1/2 years. That is a lot of wealth accumulation in a relative short time.

Even the argument that renters "can just call the landlord" if they have a problem is laughable.

First of all, you have to call someone else, hope they care enough to do something about your issue, hope they get to it in a reasonable amount of time, and then you just accept whatever resolution they decide upon.

Anybody who knows how to use Youtube can figure out most minor repair projects, and get it done to your satisfaction in a flash. Or at the very least, hire someone who is paid to perform a service *to you*.

And BTW, unless you are renting an apartment (which almost always means people above, below, next or all of these), renting a home comes with just as many issues, just less control.

In all my years of ownership, I can't think of one significant repair of any type. Maybe a clogged drain. Never a roof, or big plumbing problem, or anything of any real cost.

The money I've put into my properties has been for improvements, not repairs. And generally speaking, that is yet another investment.

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

You can get a very low-interest loan against your equity at any time.

In fact, you can take out almost all the down payment you put in.

You can also use your house as collateral for other loans. It's a true asset and you absolutely do not need to sell it to access the equity.

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

Outside of the earliest years of ownership, it's almost surely not a liability.

Almost all assets have a liability factor. Assets don't have to produce cash to not be a liability...but even taking up that argument:

If rent in your area is around $1,500 for a property equivalent to your home and the interest, taxes, and insurance only totals to $1,350 (even though your mortgage payment is $1,600), you are effectively improving your balance sheet by $150.

Opportunity cost is an actual cost. People talk about the cost of raising kids from a money out the door equation but I can assure you I have left 3x more money on the table than I've spent on my child because I don't have the time or energy to go make that money. Same can be said of delaying home ownership in all but a few markets in this country.

And ditto on the equity tapping. I've done that so many times and it has allowed me to do so many things from consolidating debt to buying vehicles outright, purchase other property and even invest the stock market (still kicking myself for not immediately plowing all of my cash out refinance proceeds into the S&P in 2020)

The only time I ever rented was before the age of 22. Home ownership from then is allowing me to now live in a $350-$400k house on a 1 acre property that has been paid for since 2011 for only the cost of taxes and insurance. Maintenance and repairs is not very much and what ever is needed I can usually do myself. Been that way my whole life. No one can do things like I can do them or want done. Some major things I've paid for over the years like a new sewer line, new HVAC, both baths remodeled, kitchen remodeled. Even some of the remodeling I've done parts of. All major repairs don't even come close the the appreciation in value the house has gone up since 1996 when I bought it. Things like minor plumbing and painting I can do. At age 69 it is nice to have that equity in my retirement years should I need it and the cost to live here is easily affordable in retirement.

Outside of the earliest years of ownership, it's almost surely not a liability.

Almost all assets have a liability factor. Assets don't have to produce cash to not be a liability...but even taking up that argument:

If rent in your area is around $1,500 for a property equivalent to your home and the interest, taxes, and insurance only totals to $1,350 (even though your mortgage payment is $1,600), you are effectively improving your balance sheet by $150.

Opportunity cost is an actual cost. People talk about the cost of raising kids from a money out the door equation but I can assure you I have left 3x more money on the table than I've spent on my child because I don't have the time or energy to go make that money. Same can be said of delaying home ownership in all but a few markets in this country.

And ditto on the equity tapping. I've done that so many times and it has allowed me to do so many things from consolidating debt to buying vehicles outright, purchase other property and even invest the stock market (still kicking myself for not immediately plowing all of my cash out refinance proceeds into the S&P in 2020)

I stress this all the time, it's the most expensive cost of all when it comes to not owning. I also stress at a minimum everyone max roth IRA contributions early as well. I'm not a financial advisor but simply just buying property at a young age + maxing roth IRA yearly will set you up big time later on. These are just what I'd consider basic & fundamentals to get you way ahead years down the road. The opportunity cost of not doing either of them is detrimental, lots of six - eventually 7 figures.

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

Do you consider a 401k a liability also? I mean, the stocks could go down, right?

I stress this all the time, it's the most expensive cost of all when it comes to not owning. I also stress at a minimum everyone max roth IRA contributions early as well. I'm not a financial advisor but simply just buying property at a young age + maxing roth IRA yearly will set you up big time later on. These are just what I'd consider basic & fundamentals to get you way ahead years down the road. The opportunity cost of not doing either of them is detrimental, lots of six - eventually 7 figures.

Two steps often deemed more important that the Roth (though not available for all)... First, get the employer match on the 401k. Second max out the HSA contribution on a high deductible plan (can invest over $3k, with tax benefits). But I am not a financial advisor either.

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

Have to live somewhere though. Hopefully if you played your cards right that house will pay your assisted living bill in the final decade of your life or a less depressing viewpoint of downsizing to a smaller home.

Two steps often deemed more important that the Roth (though not available for all)... First, get the employer match on the 401k. Second max out the HSA contribution on a high deductible plan (can invest over $3k, with tax benefits). But I am not a financial advisor either.

Sure if you have access to a 401k then you've got another consideration but many don't. I never did, personally. I invest in SEP IRA's in addition since I'm self employed now but I still max out our Roth's even though it's a smaller amount because tax free investment > all and I started those many years before I could take advantage of a SEP.

If you just buy a house young & take advantage of Roth's if you do nothing else you will still be totally set if you stay the course. Even doing it for a decade starting in your 20's gets you multiple 6 figures ahead of peers who didn't by time your in 30's. I consider these foundation pieces for majority of scenarios and of course there's a lot of other opportunities to be had depending on your situation.

With home ownership, you don't reap the rewards until you sell. Until then, you are 100% responsible for all repairs and maintenance, and most of those won't improve the value of the house.

So sure, you can benefit from owning, but unless you rent out your house, it's a liability, not a true, cash-earning asset.

Binary thinking

I’ve always found real estate prices to be high, and on a steady upward trend, so I’ve conditioned myself to avoid hesitation when the right opportunity arises, though, of course, not without careful calculations and analysis. Getting to my main point, my small experience buying a house in Vail, Colorado, I’ll start by saying I saved up for quite some time to afford a more luxurious home. As for location, I’ve always been someone who prefers winter and mountains over summer and the sea. Vail checked all those boxes, and that was that. The rest was straightforward, thanks to Morghan Jabusch, who made everything smooth and quick. And if anyone’s interested in investing in a home in Vail, you can find him here: bestrealestateagentaspen.com (https://www.bestrealestateagentaspen.com/vail-co).

It would be a dream of mine to buy a home in Vail or Aspen. Maybe one day. Vail is extremely nice because it’s right off of the 70. Aspen, you have to deal with 82 Traffic. And then at certain times of the day it’s only one lane each way unless you have a passenger. I’ll never forget how shocked I was at how many private planes they had at that airport. Telluride and Breckenridge seem cool too, but very touristy. I go to Nederland a lot when I camp at the Kelly Dahl campsite. And then when I wanna gamble, I go to Blackrock. I do want a beach house as well somewhere along the coast of Northern California perhaps Oregon. I just have too expensive of a taste without the pockets to be able to afford it. But that’s awesome you got a home in Vail. Congratulations. I go to that little urban development a lot and walk through it and sometimes I’ll drive up the mountains and look at the amazing homes and a couple of them have these Brooks with waterfalls that go in between them. It’s so peaceful.

Yeah, Aspen traffic can be a pain, but Vail is much easier to get to. Those homes with brooks and waterfalls are so peaceful! A beach house in Northern California or Oregon sounds amazing too, definitely a dream.

Figured I'd give everyone one more market update as we enter December and wrap up 2024, I can't believe it's almost over. It was once again certainly not what anyone was really hoping/expecting. We are still staring down nearly 7% 30 year conventional loan rates & long term expectations on rates have moved higher through next year unfortunately. That said:

Prices have moved up 5% year over year, similar to 2023 overall. Although we are in a seasonal/election/dip the trajectory is pretty clear prices will still continue to rise overall even in a restrictive rate environment.

Inventory has exploded- we are getting close to 8,000 properties in the MLS. Last time we had this many houses for sale was 2011 before the market finally recovered from the sub prime crisis. Interestingly enough there are less sales taking place in this environment than there were then even though the macro conditions are much better.

23 & 24 collectively will certainly go down as the least affordable years of any of our generations to buy a property. There are some comparisons to early 80's when everything was real crazy on rates but by and large things have never been this unaffordable. The 20's are shaping up to be the complete opposite of the 10's when we had record high affordability.

2024 will go down as the worst year on record for the country in total number of homes sold. If you've bought anything in the last couple years- congratulations! It blows my mind sales are worse than the great recession.

Looking forward affordability doesn't look to improve at least given most of the rate forecasts/expectations staying in the 6-7 percent range long term. Overall I'm starting to see a more balanced market with buyers making definite plans now & sellers also getting off the fence.

Just about everything looks good economically other than mortgage rates, so long as we don't have an unexpected recession or economic crisis things should gradually improve from here all things considered. It will be very interesting to see if inventory continues to grow next year or we balance back out. If we have another repeat of this year we might have more homes listed than at any point in our entire history. So much for a low inventory environment.

2025 is a total wildcard at this point IMO, there's certainly the chance it could be really good but most experts only see a small recovery with affordability possibly worsening more. We shall see what the new administration can do & if they can affect any change. Either prices or rates need to come down some and neither looks likely to occur. If you can't find what you're looking for in this environment though it probably doesn't exist.

Last time we had this many houses for sale was 2011 before the market finally recovered from the sub prime crisis. Interestingly enough there are less sales taking place in this environment than there were then even though the macro conditions are much better.

While I'm actually shopping in a different region of the country (the last few summers here have done me in), something I've noticed is a significant amount of ARMs about to kick in with current rates on pandemic properties in that region. Is that possibly also one of the factors here?