Rent to Save While Housing Bubble Grows

Physician's Money Digest, October 2005, Volume 12, Issue 14

Wall Street Journal

It has long been understoodthat buying a home and payinga monthly mortgage is a muchwiser investment than renting.Buying is usually less expensivemonthly, and you actually ownthe home once you pay it off. However, thisideal is changing, as skyrocketing housingprices make renting a more viable andcost-effective option for many. Accordingto a report, in recentyears low interest rates and mortgageinnovations have attracted many newhomeowners, which has driven the price ofhousing through the roof, and consequentlyforced landlords to reduce rents. Forexample, the monthly rent for an apartmentin San Francisco, Calif, is 45% asmuch as the cost of buying a home there.In Las Vegas, Nev, the average monthlymortgage payment is $1274 per month,compared to $860 per month for the averagetwo-bedroom apartment. Plus, therent prices don't include additional housingcosts such as property taxes—thebane of buyers. Renting especially makessense if you're not planning on staying inone place for a lengthy amount of time.