Buying? Renting? You decide

So now that this marriage thing is happening, everyone's next big question is:  Are you going to buy a house?

The easy answer is: the money that we could use as a down payment is currently being funneled into paying for a gigantic party! So no, no we are not going to be running out to buy a house the day after we get married.  Someday maybe, but not right now.

Truthfully, I'm not convinced that home ownership is all that it's cracked up to be.  It seems that home ownership is one of those 'rites of passage' into adulthood - it's the thing to do because everyone else does it.  You're supposed to get married, buy a house, settle down and raise a family.  It's what good people do.  And renting, ugh!  Only POOR people rent.  Right?  There is a bit of a stigma attached to renting, isn't there.

I've been told since I was little kid that renting is 'throwing money away', and buying a home is 'investing in equity.'  Maybe so.... but at what cost?

In a world where it takes two incomes to make ends meet, is living in debt for the next 20-30 years really worth it?  Maybe I just fell into a puddle of luck when I stumbled upon the current rental situation I'm in, but I just can't see the advantage of home ownership at the moment.  Let's take a moment to remember our grade 4  french here: mort = dead, gage = pledge or guarantee.  'Cause you tend to end up paying your mortgage until you're dead!

Here's what I know:

For starters, homes in my appropriate price range are far smaller (sq footage) than what I'm currently renting.  How is that appealing to anyone?

And then, there's this thing called 'utilities'.  Apparently, when you own a home, you are responsible for paying ALL the utilities!  You do know that the price of hydro is supposed to increase by a mere 46% over the next 5 years, right?  46%!!  That fact alone makes me want to throw up a little.

Home owners also pay property tax.  And higher insurance rates.  And.... maintenance.  Yes, maintenance.  Roofs don't last forever!  Either do windows, paint, septic tanks, furnaces, eaves troughs, floor joists, siding.... The list is pretty much endless.  Houses breakdown, degrade, fall apart. So while you're calling 15 repair guys for quotes, I'm making a quick call to my landlord, the job gets done, and I never see a bill.

Don't even get me started on interest!  Nobody actually has $200,000 to buy a $200,000 home.  We take out a mortgage and over 25 years we end up paying $330,000 in mortgage payments. So, you've gotta ask yourself, is that $200k house going to be worth $330k in 25 years?  (We'll ignore inflation and all the costs of renos/repairs & new bathrooms & kitchen fixtures you've put into it to 'increase its value'.)  It's true, the consensus seems to be that over time the value of your home will indeed increase.  But will it really?  Tell that to all the people in the United States who got burned when the housing bubble popped.  Or to a greater extreme, all those people in Japan who just watched their housed wash away in the tide.  Home ownership seems like a bit of a gamble to me.

Oh, you also realize that in order to get the equity back out of the house, you're going to have to sell it.  IF you can find a buyer who is willing to pay you what you want.  It's not exactly a liquid asset.   Sure, banks will let you borrow all the money you want if you're willing to put your house on the line; but that's actually just more debt that you eventually have to pay back.

Now, I know that I'm coming off as being very anti-home-ownership.  Everyone's situation is indeed different, and home ownership definitely comes with a certain freedom (for example, you can take a sledgehammer to your ceiling anytime you want, whereas, I have to ask permission first).  But currently for me, those freedoms do not outweigh the more fiscally responsible path of renting.  Don't get me wrong, I still feel the pull of home ownership - no one checks www.mls.ca more often that I do!  But its just not in the cards right now; it doesn't make sense (or cents).

I've done the math, and I'm pretty certain that I would be financially further ahead to save my money for the next 25 years rather than purchase a house.  And, I have finally found a really great interactive calculator that supports my conclusions.  The New York Times published this calculator back in April of last year.
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
It seems to be very thought out, takes a great deal of information into consideration, and has told me in no uncertain terms that I would be an idiot to give up my current rental accommodations!  (There is one caveat to this whole 'renting being the better choice' thing.  You need, NEED, to actively save your money, which might be difficult for some but, currently, pretty easy for me.)

So there's your answer.  My husband-to-be and I are not currently in the market for a house of our own.  And if you're in the market for new living accommodations, please do some math, check out the calculator, crunch some numbers, and make an informed decision.

I apologize to all those people I know in the real estate business, or who have just purchased a home - I mean no disrespect, I'm really quite happy for you.  This is my situation and, as I said, everyone's situation is different.  Besides, someone has to own the houses, otherwise there wouldn't be anything for me to rent!