Rent or buy? ..

[cmeisenzahl]

Fun calculator.

http://www.nytimes.com/2007/04/10/bu...T_GRAPHIC.html

 

[bkk]

Oof! I definitely bought a the wrong time.

 

[Toad]

I wonder why annual home appreciation defaults to 1%. I'm pretty sure homes generally appreciate at a rate much higher than that - maybe not right now, but on average, I'd think they'd appreciate at a faster rate than inflation.

 

[teddieriley]

this doesnt take into account the benefit of tax write-offs. if you're in a high income bracket, owning is better than renting. not only that, i'd be buying a much bigger place than i'd be renting.

 

[Happydayz]

Originally Posted by Toad

I wonder why annual home appreciation defaults to 1%. I'm pretty sure homes generally appreciate at a rate much higher than that - maybe not right now, but on average, I'd think they'd appreciate at a faster rate than inflation.

Over the long term housing prices within the US have only appreciated at 1% above inflation. The calculator is set to the default home appreciation within the US according to the widely accepted Case-Shiller housing index.

As for the tax write off - it is significantly overstated, especially at the median income level and below. It is not a write off, only a deduction. This already decreases the amount by about a third. It also replaces the standard deduction that many people take in lieu of an itemized deduction, again limiting the benefit.

Not to say that it is a great benefit. But its benefits are often overstates, especially by realtors

 

[grimslade]

Originally Posted by teddieriley

this doesnt take into account the benefit of tax write-offs. if you're in a high income bracket, owning is better than renting. not only that, i'd be buying a much bigger place than i'd be renting.

You obviously don't live in NY.