Is It Better to Rent or Buy? What to Do in a Hot Housing Market

Will Parker & Nate Rattner argue that skyrocketing home prices have moved the break-even point on the rent/home buying ratio… (Wall Street Journal)

For the median priced home, Tomo’s model shows that an Austin buyer who sells after just three years would lose $30,000 relative to renting over the same period. This is due to the projected costs of ownership, which include things like property taxes and maintenance,  exceeding home price appreciation and the cost of renting a median-price house over the same period.

The math looks a lot better for homeowners on the other side of the break-even point, however. After eight years of owning in Austin, the buyer at the time of sale would be up $30,000, compared with renting; after 10 years, $55,000; and after 15 years, nearly $140,000.