As another year of the housing downturn ends, some are wondering if it finally is more advantageous to buy instead of rent, given discounted home prices and mortgage rates near historical lows.
The answer not only depends on where you live, but also your personal finances, the stability of your job and what you expect for home prices and rental rates in the years ahead.
Historically, renting has been the better choice, according to recent research.
Renting was the better move about 75% of the time, according to “Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise?” a paper scheduled for publication next year.
The catch: Renters need to invest all the money they save.
“We find that if people don’t invest the money, actually about 90% of the time, you’re better off buying,” says Eli Beracha of East Carolina University, who co-authored the paper with Ken H. Johnson of Florida International University.
Read : “Making a New Case for Home Buying” by The Wall Street Journal