A new study concludes that renting could build more wealth than homeownership when renters invest money not allocated for rent, rather than spend it on goods and services.
"On average, renting and reinvesting wins in terms of wealth creation regardless of property appreciation, because property appreciation is highly correlated with gains in the traditional financial asset classes of stocks and bonds," wrote study co-author Ken Johnson of Florida Atlantic University's College of Business, in a release, per CNBC.
As long as home values don't fall, which has historically been the case in most markets, with the glaring exception of the last recession, homeowners are building a nest egg. They had also been getting a tax advantage. That is now at risk in the Republican tax plan, which curbs the mortgage deduction and in the Senate version, wipes out the property tax deduction.
Advertisement
Related Stories
Trade Contractors
Skilled Trades Are Open to Technology, Survey Finds
Amidst the ongoing labor shortage, technology and digital tools can offer labor-saving gains, and the skilled trades are willing to embrace new tech in their jobs
Sustainability
Mention of Eco-Friendly Home Features Is on the Rise in Sales Listings
Home listing descriptions using eco-friendly terms have been rising over the past five years in line with growing consumer interest in the environment and energy efficiency
Design
What Gen-Z Buyers Really Want in a Home
The fervor of planning for Millennials in the home building industry has now pivoted to Gen Z. So, what does this new generation want?