Renting Forever and Trying to Create a Strong Financial Future
The New York Times
Either by choice or because they are priced out of the market, many people plan to never stop renting. Building wealth without home equity requires a different mind-set.
Moving back and forth from Tennessee to Alaska, Michael Rogers and his wife Christy have twice been stuck simultaneously paying a mortgage and rent. Once, in 2006, the situation dragged on for eight months, finally ending when they sold their house in Tennessee for $20,000 below what they’d paid for it.
Other adventures in homeownership ended well — the couple doubled their money after selling a fixer-upper. Then later, with another property, they had to pay out $30,000 to fix a mudslide around their home, a mistake caused by the builder.
Two years ago, the Rogerses moved to Kingsport, in northeastern Tennessee, where they signed a lease on an apartment they thought would be a yearlong stopgap before buying again.
The couple just renewed their lease for a third year, and have decided to remain renters for good. Mr. Rogers, a construction manager, likes the convenience of being able to move when a job calls.
Either by choice or by being priced out of the market, many people have decided that renting forever is their best — or only — option. Housing costs and interest rates have risen in the last few years, and it can make financial sense to rent. (The Times has recently updated its popular rent-versus-buy calculator to help people understand the trade-offs.) In the 1960s, the median house price was a little over twice as much as the average income. It’s now nearly six times as much.
Home-ownership is a traditional strategy for long-term wealth building. For people who aren’t planning to buy, creating a strong financial plan without building home equity requires a different mind-set.
