Millennials Prioritize Owning A Home Over Getting Married Or Having Kids

A house doesn't need to increase in value to be profitable, because of two factors:

  1. typically, even after property taxes, maintenance costs, etc. the monthly costs are cheaper than renting an equivalent unit

  2. Even if they weren't, some portion of the monthly costs can be recovered by selling the house eventually. This is true even if the house depreciates in value.

Say you bought a house when it was worth 100k, with a 20k down payment, paid about 800 a month on average for all your housing expenses, and after 30 years sell it for 50k. Alternatively, you could rent a house worth 100k for 30 years and pay 1,000 a month and get nothing at the end of 30 years. Despite this scenario being hugely unfavorable (50% depreciation is unlikely) you still come out over 100 grand ahead of renting at the end of 30 years. Even if your rent decreased with the property value to be an average of 750 a month over the period, you still come out 12 grand ahead having bought at the peak of a massive bubble in the long-term.

Which one is cheaper is mostly a function of how long you live there, with renting being cheaper if you live there between 1-5 years typically, depending on market conditions, area, etc. You can look up rent vs. own calculators that take into account expected future value of the home, closing costs, equivalent rent, interest rates and everything. I did this calculation before I bought my house and found that it would only be cheaper to rent if I planned on moving within 1 year.

This is why landlords own and rent property is because of this inherent profit. Even if the value of the property goes down, you still When you own the unit you live in you are essentially renting to yourself.

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