And not just the fact that the average home owner is better off, but also that the inventory for buying vs. renting is drastically different.

Those can take a big chunk out of the appreciation when you sell and buy, and could make a difference of not breaking even for an additional year or two.

You can lever up an equity portfolio as well. Moreover, the going interest rate for a margin loan is only 1-2% (less than the cost of a mortgage).

Rents do not have to rise. They have been rising in most cities because people are moving to cities. Rents dropped in Detroit when a lot of people left. (Rents also rise with inflation.)

I do wonder about the data. It compares the median rental to the median house purchase. And people usually rent smaller places. So, renting is usually cheaper because of that. I don't know that it is an apples-to-apples comparison.

People opting out of ownership in favor of renting is an oddity, and usually is nothing about money and instead is about not wanting to be anchored by a mortgage.

If I treated the extra housing costs (we upgraded significantly from around 1000 ft^2 to 2500 ft^2) as an additional 401(k) that I contributed to, the house still wins but it’s at least close in that case.

With a 5% rent increase your monthly rent spend goes from $1500 to $5880 in 30 years (the most common mortgage term).

* Cost of maintenance and upgrades. You now have to mow your grass or pay someone to mow it. You now need to shovel your driveway or pay someone to do it. When the toilet breaks, you now need to pay for it. When your roof wears out, you now need to replace it. If you don't replace carpeting and replace appliances, your value will slowly drop. A house is basically slowly falling apart, and with no work/money will lose value each year.

At my previous house, I put roughly 5% of my purchase price into all of this junk, per year. So on a 300k house, that works out to like 15k a year, or $1,250 per month. Depending how new or old your house is, sometimes this number can change a little... but it really adds up quite a bit.

* Exposure to real estate market. If you rent and property values double (or half), I doubt you care that much (maybe rent goes up and you move out). If you own and property values plummet (see Las Vegas in 2012), you can be really screwed. You are a lot safer from all this kind of stuff by renting. Yes you miss the gains when the market goes up, but you are protected from the falls.

* Cost to sell. Costs about 10% of your final selling price to unload a house. Stay there for 10 years and the house appreciated? Awesome, you can take it out of our appreciation. But imagine your house stayed flat or lost 10% of it's value? You need to pay another 10% on TOP of that to unload it. Again, compared to renter... the renter can just move out.

But in the short term, there really shouldn't be such a big gap between renting and owning. That means that there isn't a global shortage of housing in the market, but distortions in the market because of external factors. Clearly, right now, a renter is better off waiting and putting the difference in the bank.

Yes. This is what ultimately led me to a home purchase. I rented for 3 years, and moved each time. After the first year at each place, rent was increased anywhere from 4% a month to 15% if I were to renew. I ended up not renewing a lease each time, since I didn't have many possessions and could move within a day with the help of a buddy for the big things.

I think that might answer your second question too, but I was younger and had less obligations at the time, so moving was more feasible.

I ended up buying simply because I was already renting the cheapest in my market (really bad area, but good location for my needs), and rent was skyrocketing at about 5-10% increases everywhere I looked. I bought for many reasons, but the primary driver was as a way to secure a stable monthly payment and not have too worry about increasing my future wages to keep my current quality of life.

If they did increase rates, well, I guess move? Or buy a house if rent everywhere is crazy.

I do tend to move a lot, but that's what I like about renting. Freedom. Can just pick up and leave and onto the next adventure. I owned a house years back, and it felt like a big anchor holding me down.

Kids are an important factor. I think age matters a lot. Mine is in elementary school and is just happy to meet new people.

You do get 'stability' with buying a house, but that's not always good or even a sure thing. Maybe your city will implement a bussing program and cart your kid across the county. Maybe you get an awful neighbor(s) who make tons of noise, park cars in their yard, etc.

Stability is definitely a double edged sword IMO.