Using NAR Research to Address Prospective Buyer Concerns “Why Not Rent? I Can’t Afford to Buy!”

Some people who should not buy a house:  for example, anyone who is planning to move in a few years.  People with overextended credit are also probably not good candidates for homeownership.  However, home ownership—instead of renting–appears to be a good idea for many people—particularly at a time of rising rents.

The graph from a presentation by NAR Chief Economist Dr. Lawrence Yun shows that families with homeownership have a much higher net worth than is the case for renters.  Growth in mortgage equity and longer term price appreciation are the major assets for the middle class.  The homeowner with a 30 year mortgage payment has a paid-off home after  30 years; the renter has a nice stack of 360 rental receipts.

And, of course, there are many lifestyle/social benefits that homeownership creates for families—better educational achievement by children, better neighborhoods, increased community involvement, among others.

These are good answers to the question of “Why not rent?”

HH net

Jed Smith, Managing Director, Quantitative Research

Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.

More Posts