Posted on 07/08/2023 8:36:09 AM PDT by millenial4freedom
If you’re a retiree and you’re trying to square the circle of rising costs, longer lifespans, more expensive medical care and turbulent markets, don’t be afraid to run the numbers on your biggest investment.
That would be your home — if you own it.
U.S. house prices are now so high that it is almost impossible for seniors not to ask themselves the obvious question: “Should we cash in, invest the money, and rent?”
Right now the average U.S. house price is nearly $360,000. That’s about a third higher than just a few years ago, before the COVID-19 pandemic. The lockdowns, the panic, the stimulus checks and 2.5% mortgage rates have all passed into history. But the sky-high prices remain — for now.
At these levels, analysts at Realtor.com — which, like MarketWatch, is owned by News Corp. — say that in 45 out of 50 major U.S. metropolitan areas it is cheaper to rent than it is to buy a starter home. The Atlanta Federal Reserve Bank says national housing affordability is abysmal — about where it was in 2006 and 2007, during the big housing bubble.
(Excerpt) Read more at msn.com ...
This divorced mother-of-two boomer has been a renter her whole life. I’ve never owned a home. Couldn’t afford one, or the maintenance when my two sons were small, and once they left the nest, there was no reason to own a home.
This boomer owns his house outright.
Try vacating the urban population centers. Prices are more normal.
Salaries are lower but the cost of living may be less than half.
Poor little snowflakes can’t even think for themselves anymore.
BlackRock approves.
How can Boomers own nothing and be happy unless they start renting?
They probably wrote this tripe.
The grinch coos to the innocent Whos of Whoville...just give up your miserable little manses, my darlings, and let me take care of all your problems...
The nice thing about renting is that you don’t pay property tax.
I’m not sure this makes sense for a lot of people.
If you own a home free and clear and have no mortgage payment, does it really make sense to cash out, invest the proceeds ,but then have monthly rent? Rents will only continue to increase year by year into the future.
If you own a house but have a mortgage, if you have a fixed rate mortgage and a fixed payment for years into the future, why would you trade that fixed payment for renting when rents are only going to increase your by year into the future?
It seems to me that this idea may work for certain specific people in certain specific circumstances , but a lot of people will not get any benefit from doing this.
I would hope that most boomers own a home outright. If that’s the case, I don’t understand what sense renting makes.
You do indirectly, as it’s factored into the rent.
You are indirectly paying the property tax for your landlord. Your landlord paid the property taxes, and all the tenants helped pay the those taxes along with other operating expenses of the property. Your rent is higher than it would be otherwise to help the landlord afford the property taxes.
“You do indirectly, as it’s factored into the rent.”
I know, of course. I just like to have some fun here once in a while.
We two boomers own our home outright. Renting makes no sense.
Selling would not make sense because we could not get enough for it to buy another home.
No...Most who own their homes are older folks who don't have 20 or 30 years to sit around hoping some investment/gamble scheme pays off.
With house prices this high, boomers may want to rent out a room by the week for extra cash?
Our home is fully paid for, and we’re keeping it. Better to have something physical than the money in a bank.
Of course rents are through the roof. So that’s not much of an answer either.
Sure you do. You pay your Landlord's property tax.
I’m not sure this makes sense for a lot of people.
If you own a home free and clear and have no mortgage payment, does it really make sense to cash out, invest the proceeds ,but then have monthly rent? Rents will only continue to increase year by year into the future.
If you own a house but have a mortgage, if you have a fixed rate mortgage and a fixed payment for years into the future, why would you trade that fixed payment for renting when rents are only going to increase your by year into the future?
It seems to me that this idea may work for certain specific people in certain specific circumstances , but a lot of people will not get any benefit from doing this.
You are correct on all of the above. The only time selling and then renting would make sense is if you are downsizing a very large house to move into much smaller rental property. The other aspect would be if you are also going to move from a high cost area to a low cost area.
I think the argument presented in the original article was a bit simplistic in arguing that it would make sense for most people based on the bubble price of housing.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.