Black Money Tip: It is not Always Best to own a Home

This is an article explaining some reasons why you might not feel it necessary to purchase a home.  I agree.  What is also true is that there are convenience reasons that an individual may not want to buy: if you are only living in a city for a short period of time, don't want the hastle and expense (not to mention taxes) of home ownership, you have a business that is already giving you a good return or you have a great tax write-off elsewhere.  Owning a home is great, but it is more important to remember the importance of eventually owning SOMETHING.  It doesn't have to be a house. 

Real-estate agents have been pushing the virtues of homeownership since homes were invented. Or since real-estate agents were invented, anyway. Paying a mortgage, they insist, is a can't-miss investment (the tax breaks, the appreciation, the thrill of fixing your own roof!). Renting is for simpletons who don't like keeping their own money.

But does owning a home really trump renting? With the economy stumbling, house prices falling, and credit tightening, many housing experts are questioning the conventional wisdom. "Over the last decade, it may have been true," says W. Van Harlow, an economist at the Fidelity Research Institute. "Clearly, there are periods where [the housing market] will dominate. But give this market correction another 18 months, and it may not be true anymore."

Not so hot. The housing boom produced endless stories of homeowners getting twice what they paid for their homes. But "prices don't always go up," says Jay Butler, director of realty studies at Arizona State University. Even a boomtown like Phoenix has seen median rates of appreciation climb only 4.6 percent a year since 1981. According to a Fidelity study published this year, the return on a dollar invested in real estate in 1963 barely beat that of a low-risk treasury bill.

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