A recent article in the New York Times raised the question whether it is better to rent or buy a house.
A little late I would say.
From 2000 to 2007, the media blindly pushed the idea that owning a home was an integral part of the "American Dream." But ownership is not for everyone, and there are times when the economic disparity between owning and renting is so wide that people need to stop and think before buying. During the earlier part of this decade, every rational economic analysis suggested renting over buying.
But NO ONE -- not one -- of the financial journalists raised this question until the housing bust.
People with a strong agenda to push sales -- real estate agents, mortgage brokers, lenders, appraisers -– fed everyone cooked data and information. And all the journalists happily jumped on the bandwagon. They were all drinking the same Kool-Aid, singing the same song:
“U.S. housing prices never go down. Get on the train before it leaves the station.”
As we all know today, millions of people were badly hurt by the housing bust. BUT, here is the key point:
Even if housing prices had not busted when they did, the question of owning versus renting should have been asked well before now. Whatever the status of the economy, when the economic disparity between ownership and renting is beyond acceptable ratios (as it was from 2000 - 2007), someone should at least be asking the right questions.
But, not one major publication did that. Instead (perhaps in deference to their largest advertisers, the real estate community) the theme was buy, buy, buy.
UPDATE: See this nifty calculator the NYTimes put online for determining whether buying or renting is right for you. Nice touch. But again, too little too late.