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I'd be interested in seeing how they arrived at the 14% number.
When I bought my first home a couple of decades ago I moved out of my 1 bedroom apartment which I was paying a monthly rent of $700/month into a small starter home with a mortgage of $1000/month. 20 years later that exact same apartment rents for $1350/month. All of the years I lived there my house payment never rose higher than the $1000/month mortgage payment while the rent on the apartment apparently continued to increase year over year. Meanwhile I ended up selling the starter home for $110,000 than my purchase prices nearly 20 years ago.
So is their 14% number just calculated on the first month of each (renting vs buying)?
Once you factor in things it mentions like insurance, taxes, upkeep along with others like a down payment then it's very easy to see where the 14% numbers comes from. Frankly, I'm surprised it's only 14%. There's a lot of additional and hidden costs with home ownership.
So you're agreeing with me that they're only comparing the first month of ownership of the house with the last month of renting? There's no factoring in the long term rise in rents to their math?
There certainly are, but its very situational. A 100 year old home will have very different upkeep costs than a 10 year old home. A home in a hurricane zone will have different upkeep than one that isn't.
I mean neither of us know how they arrived at the 14% number. So your comparison is not really relevant and I would say it's not a good one even. But in a generic/average month-to-month overview, home ownership is almost always more expensive.
I had a long reply typed out exploring the various aspects and raising questions to the methodology and applicability of the advice in the article to different groups of people in different geographies and stage of life. However the tone of replies seems to just want to accept the article as is. Its a yahoo finance article, so the depth is pretty shallow and only speaks in broad generalizations. Your reply is doubling down on exactly that. There's nothing wrong with that per se, but it looks like the there isn't a desire in this thread to explore it any further.
So we'll just accept the article answer which you summarize well: "generic/average month-to-month overview, home ownership is almost always more expensive."
Conventional wisdom says keep renting folks and don't question it.
Did you not read the comment? Property tax, insurance, and upkeep are all perpetual costs. The down-payment, closing fees, and potential mortgage insurance are the only up-front costs.
I read the comment. It doesn't address the question. "Over what period of time?"
Are they judging on owing a house for 30 years vs renting for 30 years or are they judging owning house for 1 year vs renting for 1 year?