Rent Vs. Buy - Are People Really Changing Their Minds About The Value of Home Ownership?

A lot of articles are saying that the American public is starting to shift away from the theory of owning a home being one of the best things ever. At least that's what many are saying.

Me? I still believe that true home ownership has incredible value. Not as an investment like stocks, bonds and gold though. Only play the housing market if you have a lot of cash to gamble with. Rewards of true home ownership come from the long-term. The love of your home, the tax write-offs, the credit health of keeping your mortgage current.

Those are all pluses. There are many more.

I was prompted on the subject of this post by an article I read this morning on Realtor.org. About strategic defaults. People that are current on all of their other financial obligations and are just deciding to default on their mortgage because it's not worth it anymore.

Not going to kid you....I despise this concept. Absolutely and completely. And, so do the lending institutions. They are going to try to determine, by a new technology tool, which people are more likely to default strategically than others.

Many Borrowers Have Strategy To Defaulting

While it won't help the current situation, it will help eliminate it in the future. We always learn from our mistakes.

Back to Rent Vs. Buy. My personal example here:

Sold back in 2006 my prior residence for 670,000. Now, those homes are selling for about 400,000. Bought my beautiful home, the first all by myself, for 610,000 right then and there. Now, it's worth about 375,000. Sheesh! Yes, I know, it stinks. But, many people are in this same boat.

Can I still pay my mortgage? Absolutely. Do I still love my home? You bet. What about the lost value? Shit happens!

But, in reality, do the math and it works out pretty equal in my eyes.

I would have paid about 36,000 year in rent, right? That's 180,000 over the last 5 years. Wow, that's a lot of money going into someone else's pocket. But, you say, that's still a huge loss in value on my current home. Well, take the 180 from the 610 and we have 430. So, I'm still 'upside' down by about 55k? Ah well, I've been writing off the interest and property taxes for the last 5 years too. And the Uncle Sam tax rate I pay is minuscule in part, large part, because of that. Truly teeny-weeny!

End of story. End of my story at least. I still believe that owning a home is far better than renting. I believe that what goes around comes around too. I borrowed money from someone, I can pay it back....I'm going to enjoy my home and pay back my debt. I'm soooo not hip on Strategic Defaulting. I'm still totally hip on Home Ownership!