It’s really not surprising at all that rents are higher than homeownership costs.

Yes there is the risk of home ownership rather than the fluidity of renting but even if monthly rent vs. mortgage/tax is a break-even, landlords have the ability to deduct some costs/taxes/interest and after 15–30 years they own the place. Banks would still lend under this condition assuming reasonable credit quality of the borrower because of the home as collateral for loan, and they still collect the interest rate gap between short-term rates and mortgage rates. Regardless, my situation is a Price to Rent ratio of 11.11 ($200,000/(1500 x 12) with under 15 being the rule of thumb point where buying beats renting. Obviously oversimplifying but sometimes rent > mortgage/tax and sometime rent<mortgage/tax.

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