[notnaut]

I understand it’s more complicated than this, but it seems really really confusing at a basic level.

In one situation you are paying someone else for a place to live, and when you stop doing that after 30 years, you’re out on the street.

In the other situation you are paying someone else for a place to live, and when you stop doing that after 30 years, you have a house.

[jandrewrogers]

Renting gives you a giant pile of additional money you can save and invest so that after 30 years you could buy a house in cash if you wanted to. The person with the house does not have this cash, they have a house instead.

After 30 years you either have a house or enough cash to buy that house. In many cases, the rate of return on the cash is sufficiently greater that it is significantly more than the value of that house.

[what]

Eh, not really? If you have money to invest after rent, you’ll also have money to invest after mortgage payments.

[jandrewrogers]

Rent is much cheaper than the total monthly purchase costs in many locales. Literally thousands of dollars per month of net cash per month to investments in the renting scenario. And that cash appreciates at equity rates rather than debt rates. This is on top of being able to invest the down payment instead of spending it on a house.

I have decades of data on this in a few locales (including Bay Area and Seattle) based on my own experience and despite buying and (still) owning homes several times. It never pays out better than renting and investing. The math doesn't math. I still buy places occasionally but I am honest about this reality.

For the kinds of places I rent the finance math is so heavily tilted toward renting that it is a no-brainer. I'm not alone in this; I know many people of means that choose to rent even though they could buy any house they wanted.

[mancerayder]

Run the numbers - mortgage with interest deduction, SALT deduction (property taxes apply), appreciation, add the principal as paying yourself back. Compare it to renting comparable home, with the rent going up with inflation (which in some places is being generous). After a few years, you'd be surprised how the math looks.

[mvkel]

Invested capital rises with the S&P (for example). A house's value rises with the rate of inflation (on average)