When it comes to retirement time, will thrifty renters get the last laugh?
Who is better off financially now, renters or buyers?
Homeowners long held an edge in this perennial argument.
After all, prices just kept on rising year after year. Throw in that nice federal tax break and why rent?
But that may be changing, and fast. Price increases, unless you live in a boutique town or neighborhood in high demand, have become a thing of the past.
And suddenly homeownership is no longer the savings/investment vehicle it once was. For the unwise or unlucky, it's now clear it can be one way ticket to foreclosure and financial distress.
Now researchers in academia are starting to come up with some hard numbers that could help those on the fence, wavering between buying and renting, make better decisions.
In a paper set to be published soon - "Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise" - a pair of professors makes a startling argument.
Eli Beracha of East Carolina University and Ken H. Johnson of Florida International University match up renting versus buying over a 30 year period and conclude that renters can actually come out ahead financially.
But there's a catch here: You have put all your savings - money that would be normally going into mortgage payments - into stocks and other investments. In other words, you have to be extremely disciplined with your finances.
And there are other variables to consider right now as well, from a stinky stock market to rents that are soaring again here in Greater Boston.
Still, it's something to chew on as you head out to your next open house.
