You may have seen reports in the news recently saying it’s better to rent right now than it is to [own your home](https://www.simplifyingthemarket.com/2023/02/23/how-to-make-your-dream-of-homeownership-a-reality/?a=713258-9a8342bcf821027012880bf1d7cccbf7). But before you let that impact your decisions, you should understand what these claims are based on. A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the [methodology](https://business.fau.edu/executive-education/bhj-buy-vs-rent-index/methodology/index.php) behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio. But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the _BH&J National Price-to-Rent Index_, explains: ###### _“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”_ The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the [net worth](https://www.federalreserve.gov/publications/files/scf20.pdf) of the average homeowner and the average renter (_see graph below_): [](https://files.simplifyingthemarket.com/wp-content/uploads/2023/03/03104440/a-homeowners-net-worth-is-more-than-40-times-greater-than-a-renters-MEM.png) So, before you renew your rental agreement, think about the opportunity to build wealth that [homeownership](https://www.simplifyingthemarket.com/2023/02/10/how-to-win-as-a-buyer-in-todays-housing-market-infographic/?a=713258-9a8342bcf821027012880bf1d7cccbf7) provides. ### Bottom Line If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision. * * *
Is It Really Better To Rent Than To Own a Home Right Now?
A look at the realities behind the rent vs. buy debate and how homeownership builds wealth.
