Homeownership may be the American Dream, but it is not always the best financial choice. Now consumers considering buying a house have a new tool to help them understand the true costs of homeownership.
Don’t Buy the Myths: Renting Can Be a Smart Investment examines the most common financial misunderstandings about owning a house and offers a series of “reality checks” for would-be buyers. Single copies are available at no cost by contacting NMHC at 202/974-2354. Bulk orders can be placed with NAA online at www.naahq.org or by calling 703/518-6141.
Researchers estimate that nearly 20 percent of house buyers would have saved money by renting, while another report by Harvard University concluded that ‘in many places, at many times, and for many holding periods during the past 15 years, renting made better financial sense than owning.
This brochure gives consumers the confidence to choose the best housing for them as well as the information they need to counter all those well-meaning people who keep telling them that they need to buy a house.
Don’t Buy the Myths: Renting Can Be a Smart Investment offers real and perhaps surprising answers to several of the top homeownership myths, including:
- Myth: I’ll reduce my tax bill if I buy a house.
Reality: A majority of homeowners reap no annual tax benefits from owning a house.
- Myth: Paying rent is throwing away money.
Reality: For the first five years of ownership, you are simply giving away your money to a bank. Nearly one-third of all buyers move within five years before they start building any real equity.
- Myth: My mortgage payment will be less than my rent.
Reality: Your mortgage payment is just the beginning. The “hidden costs” of ownership can add up to thousands of dollars a year.
- Myth: As an owner, my housing costs will stay constant. I won’t have to worry about rent increases.
Reality: Your mortgage may remain constant, but other costs, such as maintenance, insurance and property taxes can go up significantly every year. And if you have an adjustable-rate mortgage, your mortgage payment itself can increase.
- Myth: Investing in a house is a safe investment.
Reality: Even in today’s healthy housing market, stocks and bonds often still offer a better return.