Sunday, April 13, 2008

Let Them Rent Homes

The Boston Globe:

Owning a home in Boston is about 70 percent more expensive than renting an essentially identical home. Therefore the government should stop trying to keep owners in homes and instead let more people return to renting. Those families could spend the extra money on other needs. So says a new study from the National Low Income Housing Coalition.

The study joins a growing chorus making the point that home ownership is a misnomer in many cases. Many "homeowners" are people with little equity, no equity or even negative equity who are basically making monthly rental payments to a mortgage company -- rental payments much higher than they would pay if instead they were tenants in the same home.

The group argues there is little long-term benefit to ownership because prices in cities including Boston likely will continue to decline…And even if they could, they’d be better off paying half as much and investing the difference in stocks.

David Bernstein has more.

Read more of my thoughts on renting.

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