In this video, the host provides three reasons many millionaires choose to rent instead of own a home. The first reason he provides is that median home price to median income ratios are at record highs, an indicator of overvaluation–i.e. a home is not a good investment. The second reason he provides is something I previously have discussed on this blog–cost to rent versus cost to buy ratios favor renters in many markets. His third reason is that renting is a lifestyle choice.
Having been a homeowner most of my adult life, including being a mortgage-free homeowner at a relatively young age, and now being a renter, I think there are pros and cons in either case. However, both the home price to income ratios and the cost to rent v. cost to own ratios of our present times are red flags for home prices. Don’t forget growing inventories, too–now above pre-pandemic levels in 20% of the 50 U.S. States and trending ever higher.
With Respect,
P. Gustav Mueller, author of The Present