Damn. So it’s cheaper to rent instead of own in America’s 50 largest metro areas. Yikes.

[AAKing23]

Anyone speaking in favor of renting on the coli will always get attacked on here lol, it ain’t even worth the argument

 

[R.E.N. Spells Ren]

Is it possible to take the savings from renting and putting that in the market, then coming out on top?

But in most scenarios, you’ll come out in a better position purchasing the place you live over investing in the market if you’re going to live in the same area over a long period of time. I broke this down in a previous thread comparing the stock market and home values over a 30 year period:

*sigh*

I'm always very leery when I see folks advising people, especially Black people not to buy homes....have y'all been paying attention???

Putting aside investment properties because it seems that the OP is comparing dropping a down payment on a house vs investing that money and continuing to rent.
The median house sale in September 1989 was $120,000 per the US Census so 20% of that would be $24,000. People always look at how much more than that purchase price you end up paying the bank, but that's faulty, so let's play this out. With a 5% fixed rate 30 year mortgage, your monthly principal+interest payments would be $515.35. Over the course of the 30 years you would've paid the bank $185k to borrow that initial $96k. But you also have taxes, the median per this site is 1.2% of the home's value (escalating monthly per the US Census data, so yes your taxes will increase over time), and maintenance, which I'll assume is 1% of the home's value, again escalating (1% is probably way to high too, but it's about $61k over the 30 years, so maybe not if you include a major kitchen or bathroom upgrade in that timeframe). Over the course of those 30 years, you would have spent $346k (including the downpayment). If instead, you chose to rent, following this escalation in median rents in the US, you would have spent about $342k over those 30 years. Note that the 1989 rent is $600 while the 1989 Mortgage + taxes is about $640, so comparable with the home being a little more expensive monthly....at first. The costs of living expenses in each scenario is pretty much a wash over these 30 years.

Now, the rental spend doesn't include the $24k, cuz the OP is saying invest that. From Sep 1989 to Sep 2019, the S&P 500 rose by 315% (11% ARR turning your $24k to about $100k)) per this site while the DOW Jones rose by 387% (13% ARR turning your $24k to about $117k) per this site and the NASDAQ rose by a whopping 724% per this site (which is a very healthy 24% ARR over 30 years). So let's say you had the foresight to invest heavy in tech in 1989 (i.e. the NASDAQ) and saw your $24k investment blossom to about $198k in 30 years.

The buying route saw you spend $345k including the $24k downpayment. The house you bought in 1989 for $120k is now worth $299k (again using the US Census data for the median house in September 2019). $299k from an initial investment of $24,000 is a 38% ARR. Then when you consider the tax implication (you're not taxed on the first $250k of profit from selling your official residence; $500k if you're married vs paying ~15% capital gains taxes) and it's clear that the home buying route is the winner.

Of course there are a lot of variables, but you would've needed a damn good investment prospect to beat out the long term returns associated with owning your home.

And no, you don’t need to stay in the house for 30 years for it to beat renting. If you’re planning on staying in a metro area for 5+ years, you’re probably going to be better off owning your home in most circumstances.

 

[getmoney310cpt]

You see the California posters not saying shyt lol

Because we know this article is true at the moment..

You south brehs with mortgages less than 3k lol

Condos out here start at 700-750k at 6-7 percent interest rate before HOA fees houses 900-1.5 million..yall could pay that mortgage for 30 years with no wife? Yall got 20 percent down on 700k with no wife?

South brehs not living in real America it’s still easy mode down there can get a 4 bedroom for 350k lmaooooooooo

 

[Belize King]

You see the California posters not saying shyt lol

Because we know this article is true at the moment..

You south brehs with mortgages less than 3k lol

Condos out here start at 700-750k at 6-7 percent interest rate before HOA fees houses 900-1.5 million..yall could pay that mortgage for 30 years with no wife? Yall got 20 percent down on 700k with no wife?

South brehs not living in real America it’s still easy mode down there can get a 4 bedroom for 350k lmaooooooooo

My Sister bought in the Bronx in 2019. $650k.

She had some musts she had to have and they wanted a certain size but she was looking hard. Very little under 500k and even the houses 550k range were

She finally found the one and they locked that down asap. They kept their old house mart Castle Hill.

East Coast Brehs have to deal with them prices.

Hopefully we aren’t selling the Boomers legacy and keep the family house in the family.

 

[Braman]

You see the California posters not saying shyt lol

Because we know this article is true at the moment..

You south brehs with mortgages less than 3k lol

Condos out here start at 700-750k at 6-7 percent interest rate before HOA fees houses 900-1.5 million..yall could pay that mortgage for 30 years with no wife? Yall got 20 percent down on 700k with no wife?

South brehs not living in real America it’s still easy mode down there can get a 4 bedroom for 350k lmaooooooooo

Check out Naca Neighborhood Assistance Corporation of America
https://yelp.to/OcCcbk6qDa

They have NACA in Cali Smh nggas is lazy. Lazy, hard headed, and ignant

 

[romeodunn]

No, it’s not. They never account for principal paid down, tax write offs and asset appreciation. Is this some sort of owner-class scam to convince the poors to be happy renting forever?

I am in Massachusetts it's much cheaper to rent with current interest rates. We are saving for a house and unless one picks an absolute shyt hole renting is way cheaper. Even accounting for appreciation it's still cheaper. A house's appreciation only matters when you sell(and I don't plan to sell, where I move is where I wanna stay). 20% down on a half way decent house where we are is still six figures so not money that one can come up with overnight. And I make a little over 200k, wife makes six figures too so it's not like we can't afford something nice but right now with these rates nothing is cheaper than what we pay in rent and we live in a huge loft. When you account for time value of money one can take the extra money not sunk into a house and still come out ahead simply investing in an index ETF that tracks the s&p 500 (even with 20% down the mortgage would be more than my rent by over $1000, and we are 35 minutes from Boston, anyone trying to buy really close to the city is fukked unless they make half a million). We plan to buy because we will need the space once we try for another kid but folks on here make it sound like all of America has Mississippi real estate prices.

 

[IsThatBrothaMouzone?]

I agree that this should be taken into account. But by the same token, the difference in rent vs mortgage payments+interest+maintenance costs could have been put in the market every month for decades. So that opportunity cost should also be taken into account...

Good points.

Owning has a lot of benefits because it has a 2-for-1 element: paying the bank (and essentially yourself) for a place to live that holds value. BUT....you can put the cost savings from renting into an index fund and end up sitting on a nice pile of liquid cash.

The cost of renting is just the rent. The cost of owning only starts with the mortgage. It's better to own if you have the money or if you're uncomfortable trading securities.

 

[Turbulent]

Good points.

Owning has a lot of benefits because it has a 2-for-1 element: paying the bank (and essentially yourself) for a place to live that holds value. BUT....you can put the cost savings from renting into an index fund and end up sitting on a nice pile of liquid cash.

The cost of renting is just the rent. The cost of owning only starts with the mortgage. It's better to own if you have the money or if you're uncomfortable trading securities.

And i forgot to mention that the down payment could also be put in the index fund

 

[getmoney310cpt]

Check out Naca Neighborhood Assistance Corporation of America
https://yelp.to/OcCcbk6qDa

They have NACA in Cali Smh nggas is lazy. Lazy, hard headed, and ignant

So they will help you with the money down on a 1.3 mil house, or an 750k 1 bedroom condo?

 

[JT-Money]

REPORT: RENT IN ATLANTA INCREASING 3 TIMES AS FAST AS WAGES​

Report: Rent In Atlanta Increasing 3 Times As Fast As Wages

According to a Zillow report, Atlanta residents are under financial pressure as rent continues to increase faster than wages.

www.blackenterprise.com

According to a report from real-estate marketplace company Zillow, rent in Atlanta has been growing almost three times faster than the wages in metro Atlanta area since the COVID-19 pandemic, WSBTV reports. From 2019 to 2023, rent increased 35.6% while wages increased by 12.2%.

Nationally, the rent and wage trend had been similar until 2022, when “rent went up 30.4% and wages increased by 20.2% across major metro areas during that time.” According to Zillow, in 2023 the trend switched. Rent increased by 3.4%, and wages increased by 4.3% across most major metro areas. Not in metro Atlanta: Reports showed that rents went up by 0.3% and wages increased by only 0.2% in the last year.

 

[Raw Lyrics]

Cap lmaoo

My mortgage is $2200 on 3500sq.ft smack in the middle of Brooklyn and Queens

When did you cop?

 

[BigMoneyGrip]

When did you cop?

2005 for 600k

 

[Raw Lyrics]

2005 for 600k

You winning.
A lot of Coli heads be telling fiction, so forgive me since I was ready for you to say some dumb shyt like 2022.

 

[BigMoneyGrip]

You winning.
A lot of Coli heads be telling fiction, so forgive me since I was ready for you to say some dumb shyt like 2022.

Wild shyt my moms first purchased her home back in 1994 in NYC brand new homes for $150k talk about a fukkin win… paid it off 7 years ago.. home now worth $920k

 

[Luke Cage]

It you looking the save money, the "50 largest metro areas" is probably the last places you should start.

What is wrong with living a bit further out? Not saying you need to live out in the country. but damn, i'm 10 minutes outside of a small city. and i got access to all the city lifestyle i need.