Homeownership is a Better Way to Producing Wealth

According to the latest study homeownership is a better way to produce greater wealth, on average, than renting. The Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index is a quarterly report that attempts to answer the question:
Is it better to buy or rent a home in today’s housing market?

Homeownership is a Better Way to Produce Wealth
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The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers use a “'horse race' comparison between an individual that is buying a   home and an individual that rents a similar quality home and reinvests all   monies otherwise invested in homeownership.” Ken Johnson Ph.D., Real   Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states:
“The nation as a whole is in buy territory.   Continued near record low mortgage rates, unsteady stock market performance,   and rents (on average) now out pacing the cost of ownership (maintenance,   taxes, insurance, etc.) all combine to favor owning and building wealth   through home equity over renting and reinvesting in a portfolio of stocks and   bonds.”
Dallas, Denver and Houston currently remain deep in rent territory but, “there is some degree of good news from   these markets for homeowners as the cost of renting is now increasing at a   faster rate than the cost of homeownership — reducing the advantage of   renting over buying.” 

Here’s the Bottom Line
Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now. To Find Out   More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.

Homeownership is a Better Way to Producing Wealth