quote:
Everywhere I see, it is being proclaimed by many news organizations via monthly cost analysis between the two that owning is cheaper than renting.

That was the conventional wisdom until about 8 to 10 years ago.

quote:
Even I have said similar things in the past, usually revolving around the notion that renting was like throwing money away.

It generally is, if you consider paying, as you go, for living space "throwing your money away" - the money never comes back, never grows, never yields any sort of benefit - other than pay for your living space.

quote:
But now that I am playing with numbers, it seems that from a balance ledger standpoint renting wins and it isn't even close.

It's probably closer than you think, but, particularly for someone who does not care for/can't afford the general upkeep of a house, renting is a transparent way to pay for living space. However, once you figure out how much of the interest a mortgage owner gets subsidized, the potential of paying off the mortgage and living "rent/mortgage free" for some time, appreciation (heck, real estate USED to appreciate, in the before times, in the long, long ago), it is probably much closer to a zero balance.

quote:
The fundamental killer is the opportunity cost of that down payment that could otherwise presumably sit in a retirement account. And the resulting difference can easily balloon past the million mark, if not multi million if you buy young.

That's true, but most youngsters get a reduced down payment, bond money, FHA, or other type of assistance for that first buy-in.

There are also transaction costs, significant ones at times, associated with buying versus renting.

I believe that if it is certain you will be in one spot, and happy with the home you've selected for 12 years, plus, it is probably a slight win to buy at that point. Anything less, you're probably much better renting. Buying becomes a clear winner, probably at 20 or 25 years, but that is a longer game than most people are comfortable planning.

This post was edited on 4/7/13 at 11:59 am