Renting vs. owning in a battle royale
If anyone is delighted by the paradigm shift that came with the housing crash, it's apartment owners. They'd been arguing for years that renting isn't a waste of money, but few people seemed to agree until a lot of folks who bought during the market's height ended up way underwater on their mortgages.
Five years after the housing bubble started deflating, many more people are renting -- some by choice, some not. The homeownership rate in the Baltimore metro area, for instance, peaked at 75 percent at the beginning of 2006 and is now down to 66 percent, according to Census Bureau estimates. Homebuying activity is on the rise again, but from a pretty low bottom.
Loyalists on both sides of the own vs. rent debate are continuing to fight it out for hearts and minds.
The National Multi Housing Council, a trade group for the apartment industry, titled its newest annual report "Renter Nation" and argues that demographics are on its side: a shrinking share of the population in nuclear families, more baby boomers looking to downsize and many of their "echo" boom kids at an age that's prime for renting.
"University of Utah Professor Arthur C. Nelson estimates that between 2008 and 2015, nearly two-thirds of new households formed will be renters," the group says in a March press release about the report.
Lender Wells Fargo offers up its own demographic reason for people in the homebuilding and -selling industries to take heart: Those echo boomers -- also known as "Millennials" -- are getting older every day, and some are already in their mid-20s and early 30s. They're potential homebuyers, and there are millions of them, the lender says.
"We're going to have to figure out how to reach them," a Wells Fargo executive told 26,000 real estate agents in a presentation shown on movie theaters across the country last week, according to a HousingWire report.
What all this means for the homeownership rate here and nationwide will be interesting to watch play out. There's so much to consider: What about the possibility that required downpayment amounts balloon or that the mortgage-interest tax deduction withers? Or that Americans -- Millennial or otherwise -- will be leery of putting down roots in case a job transfer or loss makes moving necessary?
But presumably some attractions of homeownership won't go away. You have a lot more freedom to change the place to suit you. As long as you keep up with your bills, it's very unlikely that your right to live there would ever be taken away. And once the mortgage is paid off, your monthly housing costs are maintenance, insurance and taxes.
Where do you come out on the rent-vs.-own continuum? Do you expect to do both at various points in the future or only one?
And which do you think has the edge in the future?