Renting is Throwing Money Away, Right? (2015)

Bad assumptions in the article. Firstly, rent in major cities (like where many of us live) is higher, sometimes much higher, than the mortgage payments for similar properties (home prices in my area give a mortgage payment of around 1500... rents are at 3k).

Secondly, you can get homes for way less than 20% down without huge jumps in total cost these days through various programs. The people making the choice between renting and buying are those who would be taking advantage of programs like FHA loans.

>The market tends to decouple from that logic in an appreciating market.

I don't know how decoupled but I definitely know of cases where someone bought and has a good longterm tenant and that tenant gets a pretty good rate because they're profitable, a known entity, and low maintenance.

To be fair, you may want to retire somewhere different from where you live when you're working--and may want, for example, a smaller place that requires less maintenance. But, yes, there's a strong argument for the desirability of owning your own place if you're a healthy 65 year old because you don't want to one day wake up and find you need to move in a couple months because an owner has sold a building.

Around here most management companies probably wouldn’t care.

These aren’t small mom and pop operations but companies with straightforward rules. You’d probably get an eviction notice before a human was in the loop.

Nothing could be better suited to the Boomer condition than buying real estate, so for the class of people who would rather die than think which is the ideal for most americans, cliches about buying always being better than renting ARE true if you're propagandizing legacy boomers about how wise they were to follow the herd a long time ago and BTW here is some delicious clickbait advertisements etc. For everyone else, yeah, not so much.

Schillers graph and assumption miss the point that we're in a long term multi decade credit crisis where the $ of GDP per $ of (new or existing) debt is collapsing. That leads to collapsing interest rates because you can't squeeze blood from a stone, low rates of investment return, hyper focus on risk control and limitation outside VC type gambling, etc. And housing prices are based on a constant $X/month being available to dump into mortgage (or rent) payments, so collapsing interest rates from normal levels when a gen-Xer was a kid to insane low levels now mean insane high real estate prices. House purchasers do not rationally evaluate the worth of a house like Graham and Dodd securities analysis from the 30s... Its a simpler calculation, I make the 95th percentile of income or whatever, I can afford $X/mo the COMMISSIONED real estate agent found me a great home which is also at the 95th percentile of luxury and quality and neighbors which costs $(X1.1)/mo (see comment about being commissioned salespeople, LOL) and at insane present interest rates $(X1.1)/mo magically turns into some insane and detached from reality purchase price. You're always buying the biggest loan you can afford, to live in the same house you'd live in regardless of current interest rate. And if you individually are a cash buyer or some other situation, it doesn't matter the market is swamped with loan buyers who control the price of the market regardless of your different personal situation.

We have too much debt for the size of economy we have, and the aging of generational shifts result in new leading and declining markets, leading to crazy weirdness. That's the current bubble economy in one line.

The main financial puzzle of life in the 10s, 20s, and beyond, is how to profitably short, or at least not get stuck in the carnage, of the post Boomer era in ... everything. Having a giant dollar value illiquid asset stuck like a millstone around your neck is probably not the best strategy for the future even if it was the best strategy for the past, that's all the article is really saying. Leverage is always only numerically illustrated by rising prices; post boomer the prices will fall.