Turtle Creek Gardens’ peaceful pool

Homeownership is the most consistent way to build up the nest egg you’ll need in retirement. People who downsize their homes are cashing out equity built up over a lifetime (and telling the kids they’re on their own). Sure, there are many reports that claim folks who rent in some areas make out better. But they’re always predicated on the renter investing the difference between the rent and the mortgage/taxes – which almost no one does. Instead, flush renters eat out more, buy more shoes (or in my case, shirts) or wend their way around the world collecting selfies.

The increased incidence of renters is troubling in many countries. When I spoke to HGTV presenter Richard Blanco in London recently, he agreed it would have an impact on tenants later in life. While student loans are an issue here, the issue both countries shared was a desire by younger people to live a catered life (as they did with mom and dad) where they farmed out the reality of living.

For those smart enough to embrace property ownership, the down payment is often a stumbling block for younger buyers. So without living in your Star Wars-decorated childhood bedroom, how does a potential homebuyer save? Especially when Uptown digs can scrape $3 per square foot per month?

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Depending on where we are in the real estate market’s cycle, it might be more financially advantages to rent rather than buy a home. According to CNBC’s Dana Olick, it’s better to rent than to buy in today’s market. But is that really the case?

Take a look at the fact and figures in the 21st episode BobMortgage Zone with Bob Johnson (AKA BobMortgage), the senior mortgage adviser at the nation’s oldest private lender, Wallick & Volk. What do you think?

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Y-o-Y-increase-in-renter-occupied-vs-owner-occupied-households-2014vs2015There is a new buzz word in real estate: Over Renter.  This term is used to describe individuals or families that make $150,000 or more annually that choose to rent a home or apartment in lieu of purchasing a traditional home.  These high-income renters certainly can purchase a home but elect to pay top dollar for renting smaller, more conveniently located living spaces … and they are happy about it.

According to a recent study by RentCafe, in the Fort Worth market alone, the number of  high-income renters has increased 77 percent since 2014.

As Fort Worth continues to increase in population, the number of renters and buyers should continue to remain at a high level.  The question remains, “is this a good thing?”

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Renting Vs. Buying screenshot

A friend of mine has been following our recent analysis of demographic groups more likely to rent or buy, especially this story by Candace Tharp and this breakdown of Census info, and sent me a link to this online lecture from a Khan Academy instructor that dissects the costs associated with renting versus buying a home.

The instructor, who lives in Northern California’s Silicon Valley, attempts to compare the cost of renting versus buying two identical homes. About 40 seconds in, though, my journalist spidey sense went off when the instructor started making generalizations and using absolutes, saying “Well isn’t buying always better than renting?”

Well, isn’t Veuve Clicquot always better than Cook’s? I may think so, but that’s just my opinion. 

That’s where the instructor jumps off into criticizing homeowners for peer pressure, Realtors for, you know, wanting you to buy so they can make a living making sure you get the best deal possible for your new home/home you are selling.

Really, this looks to me like not only an oversimplification of a naturally cyclical market, but a gross oversimplification of a very complicated buying process. Heck, the instructor even admits that he’s oversimplifying things. He’s basically bending his logic to his assumptions.

So, watch the lectures and tell me what you think: Is it always better to buy than rent, and what is up with the ridiculous rents in Silicon Valley? I’d move to Texas instead!

Trulia Heatmap

What a cool feature! I love that Trulia is coming up with cool ways to make their cache of data more accessible. If you’re a buyer and want to know if it’s more prudent to rent or to buy a home in your city, check out this cool color-coded heat map.

My favorite feature is that you can adjust the data points you want to see, like rent/buy ratio and rent prices, without having to do all the rigamarole that usually comes with finding the data you need. Hopefully Trulia will come out with a similar map feature for first-time homebuyer data. Now that would be enlightening.

Of course, some of the results will stun absolutely no one. Of course it makes more financial sense to rent in NYC, San Francisco, and Seattle. The shocker for me is that corresponding rent prices vs. rent/buy ratios were high in Kansas City, Mo.,  and Memphis, Tenn.

Anyway, go fiddle with the interactive map and post your personal insights below!

Trulia RentvBuy Graph