The Daily Stat from Harvard Business Review

October 6, 2015     Is the U.S. Obsession with Home Ownership Justified? Low mortgage rates and other factors currently make home ownership economically preferable to renting in the U.S., but it isn’t always so, say Eli Beracha of East Carolina University and Ken H. Johnson of Florida International University: From 1978-2009, renting was preferable to buying, as long as people conscientiously reinvested their savings, according to an analysis of 28 American regions. This finding casts doubt on what the researchers call “an almost national obsession with homeownership.” Their rule of thumb: If you believe that real estate appreciation is likely to be less than 3.25% annually over the next 8 years, then renting is preferable to buying (but this is an average figure for the entire country). SOURCE: Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise?

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