Best Time

To Buy a House?

When Cost is Below Rents!

DYI:  The obvious downside is that you will have to wait years before your next opportunity and yet there is the upside for having a greater down payment, basic savings, along with additional dollars for retirement since your outlay is less by renting (see chart below).

In my opinion homes purchased today will underperform inflation for the next 20 years.  The house will increase in price but when you factor inflation when selling, the gain will have a reduced purchasing power.

Putting some numbers to the equation the gain is 1% to 2% per year on average for the house with inflation on average over the next 20 years at 5%.  Doesn’t take a math genius to figure out that home owner is on the losing end.

Rents will go up in cost and yet it will take years (most likely 10 to 15 years) before they catch up to a purchase price of the home.  Remember a landlord can only charge what the traffic will bear therefore impossible to arbitrary raise rents unless willing to have numerous units vacant (losing money) in the case of an apartment complex or a house sit idle (losing money again) waiting for the next tenant.

Since the year 2000 a housing crash was required to bring down costs below rents and most likely will be required again for homeownership below cost.