According to an article listed above, median time in a house is 13.2 years and average time is 8 years, so what is the point of talking about 20 years for the typical person?rockstar wrote: ↑Thu Jul 27, 2023 10:48 amYou effectively have rent control, and your loan is leveraged. It’s the leveraged bit that gets people into trouble when they rent versus own. You’re not paying the full price up front. You’re paying some fraction of its value. This is all you could have alternatively invested. The next bit would be repair costs. However, I’d argue that a renter would eat a lot of this up in moving costs if they don’t stay put.ncbill wrote: ↑Tue Jul 25, 2023 12:52 pmEven after 13 years, for a 30-year mortgage relatively little principal has been paid back.SmileyFace wrote: ↑Tue Jul 25, 2023 11:38 amDid you read the article you posted? The median was 7 years decades ago - it's now 12 to 13 years and increasing. If you plan to be below median - maybe renting works out better. But for those of us that are above median - it sure feels good not to have thrown money into something other than rent for 25+ yearsncbill wrote: ↑Tue Jul 25, 2023 8:17 amMy in-laws have been in their home over 50 years but that remains the exception.
The average time to stay in one home is only around 8 years here in the USA:
https://www.thezebra.com/resources/home ... ownership/
In that time there's little principal repayment on a standard 30-year mortgage so most homeowners are just renting from the bank.
So, again, most homeowners end up simply renting...from their mortgage lender.
Rents by me have more than doubled over a 20 year period. A $650 apartment now costs $1800.
So here is what happens. The renter invests in theory a down payment on a home. So they get appreciation over the buyer of this amount. Now, in order to do that, the renter is subject to rent increases. In my neck of the woods, that renter would see their rent go up over the last 20 years by the above. And home prices went up around the same percentage.
So after 20 years, the buyer has their appreciation along with their principal payments. The renter now has higher rent and the appreciation of the down payment. They also experienced rent increases over that time period meaning that the buyer had better monthly cash flows offset by maintenance. The maintenance would have to be really bad. Otherwise the owner can be applying the difference in rent and mortgage to investments.
Unless the renter has rent control, how do they win?
As for the cost of moving: the average cost is listed as $4000.
https://www.bobvila.com/articles/how-mu ... t-to-move/
That is about $300 per year for some that is in a house for the median time frame and $500/year for the average time frame of 8 years.
Compare that to typical home maintenance costs.
As I said previously, this is a very complex issue with possibly no easy answers.