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Originally Posted by AtomicLabMonkey
The biggest reason is that paying rent every month is simply pissing money away into the wind... you might as well just set it on fire for all the good it's doing you. At least if you're making a house payment instead, you're building up equity. If you're going to be in an area for a long time, then after a set period it becomes a real financial advantage to have bought something vs. just continuing to rent. Play around with one of the rent vs. own calculators... fun with numbers.
http://realestate.yahoo.com/re/calculators/rent.html |
I think you missed my point. If you can build equity faster than the market around you then sure, it's a benefit... but the cheaper houses build equity slower than the more expensive ones, so when it's time to cash in, you still can't afford to move!
Look at my roommate. His house as gone up in value like 80% in the last 10 months. However, he can't move because the cost of houses like his have all gone up that much.
You don't truely build equity until you own property that you're not living at. Paying a mortgage isn't much different than renting until you can afford to move to a new house and rent out the old one.
Also: here are my numbers on that calculator you posted
LINK
Assuming the market flattens out like I expect, I'll *lose* $64,000 in 5 years if I buy a $350,000 home.