Tuesday, October 13, 2009

Renting vs. Owning

The NY Times had a recent article 'The Hunt - The Apartment Hunters are Happy Renters' which follows a couple that were previous owners, but felt they were sucked into owning by the boom.

Nearly four years ago, “it was the height of a crazy bubble,” Ms. LeCount said. “We just wanted to buy something. We were like fresh meat.”

But after living for three years in the condominium they bought in Weehawken, N.J., they regretted it.

They had no idea what they were getting into. “We are not home improvement specialists,” Ms. LeCount said. “We are not the people who should be going to Home Depot and looking at grout.”
In other words, while the housing boom and subsequent bust has put a lot of people out of homes, it also trapped many would be / should renters into long term mortgages. But, as the chart below shows, that trend may be shifting course.

It will be interesting to see how home ownership is viewed after this mortgage crisis dissipates. The traditional benefit of ownership (building wealth, tax benefits, pride) may now be offset by what a mortgage actual is... a long term liability.

Source: Census