Is owning a home really cheaper than renting?

In general, buying you will come out WELL ahead, especially over a long home from. Not sure why this sub always argues that it is so close. No, it’s not, unless moving in 2-3 years or less. What people don’t understand is that when you buy, your real estate investment (house) has leverage. Meaning if you put 20k down on a 100k home and it increases in value by 3%, that is really about a 15% return on your money in 1 year (3k gain in 20k). Of course you have to subtract the interest rate of the mortgage overtime etc but this is for simplicity sake). Sure you could rent and put that 20k into the stock market which averages 8% but with buying, your investment would really be 100k with that same 20k.

/r/personalfinance Thread