美国国家公共电台 NPR Rent Or Buy? 6 Ways To Consider? The Pros And Cons（在线收听）

CHRIS ARNOLD, HOST:

When Michelle Singletary was in her early 20s, she was living with her grandmother to save some money for a year. And while she loved her grandmother, living together was sometimes a little too close.

MICHELLE SINGLETARY: Because even though she was sweet, she was crazy (laughter). She - I didn't have to be at work at 10 in the morning, and she'd get me up at like 5 or 6, afraid that I'd be late for work. I worked, like, 15 minutes from our house. And she just - like, she came in one morning and was like, you've got shoes underneath your bed. That means the man is going to walk out of your life. And I was like Grandma - Big Mama, I don't have a man.

ARNOLD: (Laughter) Michelle decided it was probably time to have her own space, so she rented an apartment nearby and would often call her grandmother to check in.

SINGLETARY: The first thing out of her mouth was - you still renting? You still giving your money to the white man? That's how - you know, my grandmother was Southern, so that's how she presented it. You still renting? You still throwing your money away? You still giving your money to the white man? Every single time...

ARNOLD: Every conversation.

SINGLETARY: Every conversation for a year.

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ARNOLD: These days, Michelle is a personal finance columnist for The Washington Post and a regular here on LIFE KIT. And she knows that a lot of people feel pressure to buy a home, maybe not as much pressure as she got when she was only 22 years old. But the significance of homeownership runs very deep. In Michelle's case, her grandmother was so passionate about it because, to her, owning a home represented something bigger than just having a place to live.

SINGLETARY: You know, my grandmother was direct descendants of slaves. And so, for them, owning property, owning land meant that - not only were you free from slavery, that you had arrived. You had achieved the American dream.

ARNOLD: Michelle did end up buying a house back then. And you know, that is the American dream for a lot of people. But how do you know if it's right for you - at least at this stage of your life? Is it a smart financial decision? Will it make you a happier person? Or is it even attainable?

SINGLETARY: When you find that place, there is such a great feeling to it. But then there's also the financial part of me that's like - can you afford this? Are you doing the right thing?

(SOUNDBITE OF DOORBELL CHIME)

ARNOLD: Hello. Welcome to LIFE KIT. Come on in. This is your NPR LIFE KIT for home ownership. This episode - renting versus buying. What makes sense for you? I'm Chris Arnold. I cover personal finance and consumer protection. And we're going to lay the foundation for your decision, the staircase for your future. OK. We're going for it with this metaphor. We're going to blow the roof off this rent versus buy question - building equity, sacrificing freedom, plumbing disasters and profound joys - right after this.

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ARNOLD: I've always been struck by the terminology around housing. If you think about the words landlord and tenant - right? - we say those a lot. We don't think about them too much. But those come from feudal times.

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ARNOLD: A king and the nobles owned the land. And you were, like, a landed lord. And then people who worked the land were serfs, you know, the tenant farmers with bales of hay on their backs. And these are terms that we still use all the time, so maybe this is just some random vestigial quirk of language - but probably not. There is still money and power tied up in whether you own property. Even in terms of just owning your own house, this is still really powerful.

ALANNA MCCARGO: The numbers are incredible.

ARNOLD: That's Alanna McCargo. She's the vice president of the Housing Finance Policy Center at the Urban Institute.

MCCARGO: I was a realtor. I was also a banker. I was a lender. I was a compliance officer.

ARNOLD: So Alanna's seen all sides of the housing market. And the numbers that she's referring to are comparing the net worths of homeowners versus renters.

MCCARGO: In 2016, the average net worth of a homeowner was $231,420. The average net worth of a renter - $5,202.

ARNOLD: Wow. I mean, that is a striking number. If I'm doing my math right, that means you have 50 times more wealth if you're a homeowner versus a renter in the U.S.

MCCARGO: Yeah, that's the - isn't that amazing? And when you look at this broken down by, you know, across racial dimensions, you can really start to see - we hear about the racial wealth gap, racial homeownership gaps. These gaps are incredibly related to overall wealth.

ARNOLD: And that is our first big takeaway. Tip No. 1...

MCCARGO: Homeownership is the No. 1 way to build wealth in America today.

ARNOLD: So if you're debating - you know, should I rent or should I own? What's the right thing to do? - this is a really important thing to consider.

MCCARGO: Families have built wealth for generations and financial security over time as a result of their owning a home.

ARNOLD: You build that wealth with a home over time because the mortgage payment is essentially forced savings, and you see that money building steadily up over time. And you could take out a loan against it - if you pay it back - that can help you or your family with other big expenses. So Michelle's grandmother was right. You're not giving money to somebody else. When you own, you're giving it to yourself and your family.

MCCARGO: You see, you know, the money build over time. It helps you buy your next property. It helps you, you know, put your kids through college - all these things that the wealth-building that comes through homeownership can bring.

ARNOLD: OK. So that is a big factor on the pro side of buying versus renting, like, an enormous truck-size factor to consider. But let's take a step back here. Of course, the money is part of the equation. That's a big part of it. But at what stage of life is becoming a homeowner the best idea? And if you're not there right now, you shouldn't feel bad about that.

ELIZABETH DUNN: For every homeowner who's making a really good decision and purchasing a home that provides this satisfaction to them that they wouldn't have gotten from renting, there's somebody else who bought a home and it maybe made them less happy than renting.

ARNOLD: That's Elizabeth Dunn, and she's a professor of psychology at the University of British Columbia. And she studies how spending money affects your happiness. And she says you don't want to just blindly rush into buying a home thinking, oh, this is what I have to do, I mean, to be a real grown-up. This is the thing that's going to make me happy.

DUNN: ...And that kind of just sort of blanket, default buying a home is the thing I need to do next as my next, like, assumed step in the ladder of life - that's where I think people maybe get into trouble in making decisions.

ARNOLD: It turns out there's very little data to show that buying a home makes people overall happier. And - this is our next takeaway - tip No. 2, buying a home is not an automatic ticket to the good life. It won't necessarily make you more happy.

DUNN: Yeah, I mean, it's such a built-in concept that, of course, homeownership makes you happier, that there's actually not that much great data really putting this to the test. You know, if anything, homeowners seem to experience a little bit more pain from their homes.

ARNOLD: Homeowner Eulora Skelton (ph) knows about this all too well. She's 24 years old. She's a high-school teacher in Atlanta, Ga. And a few years ago, she compared the cost of owning to renting and decided to buy this one-bedroom condo for $140,000. It was in this nice, old building. It wasn't that much money. And it had a great view that she just loves.

EULORA SKELTON: The Ferris wheel out in front and the Tabernacle, which is a music venue here in Atlanta. It was an old church in the 1920s, an old Baptist church. And my favorite thing to do, absolute favorite thing in the world, is to sit on my couch with a massive cup of coffee. And - it's, like, a Saturday morning - and just stare out and watch the world go by.

ARNOLD: Elizabeth Dunn says that things that change, like a nice view, can actually make you happier over longer periods of time than something that stays the same, like fancy countertops - those you stop noticing. Anyways, Eulora is loving the view with her coffee. But then disaster struck.

SKELTON: A pipe in the wall burst. And so the flooding went down nine floors. So this was, like, a half-million dollars in damage.

ARNOLD: Wow.

SKELTON: So that was a debacle.

DUNN: If you're a renter and something like - you know, your pipes burst or there's some massive problem, you just move, right? And I think this is a great example where, you know, the upside of stability of homeownership can quickly turn into a real problem for you because you can't just exit a challenging situation. You're kind of stuck dealing with it.

ARNOLD: And this is our next takeaway. Tip No. 3, renting gives you flexibility. And you don't have to deal with maintenance and plumbing problems and all these things that can be really expensive. Eulora's condo association was, needless to say, not pleased about this plumbing disaster. And it sounds like insurance companies involved started fighting over who would pay. And so neither one of them was paying for a while. Eulora started racking up credit card debt, staying in an Airbnb because her condo was flooded. But look. I mean, when you're a homeowner, sometimes, you got to deal with really expensive problems.

SINGLETARY: Lots of people often say about homeownership that it's cheaper than renting, but they're only looking at the mortgage payment versus a rent payment. They aren't looking at the maintenance of a home, the insurance of the home and the fact that all hell could break loose.

ARNOLD: That's Michelle Singletary, who we heard from before. Her grandmother got her to buy that house. She says homeownership is great when you're ready for it. But unfortunately, that also means being ready for plumbing disasters. And sure, I mean, insurance will pay for some of this stuff eventually. But broken stoves, water heaters. You got to get your house painted. You got to pay for all that stuff.

SINGLETARY: And so oftentimes, people will do whatever they can to get into the home, and there's no cash cushion. There's no savings. They used everything to get into that home. And because oftentimes, it's a little bit of a stretch, they don't then save because then they've got to fill it out with furniture and do all this other stuff. And then something like this - a pipe breaks. And there's no money to take care of the maintenance. You know, a home is like a kid. Man, they cost money.

(LAUGHTER)

ARNOLD: They can make you happy. But they can also make you sad. And they're very expensive.

SINGLETARY: That's exactly right. It's the same thing with a home. The longer you own a home - you still can love your home. But you also understand that you put a lot of money into it besides that mortgage payment.

ARNOLD: Michelle says when you're a homeowner, you want to be autodepositing money, probably a couple hundred dollars every month, into a fund for emergency home repairs.

SINGLETARY: And furthermore, homeownership prevents you from moving to where the job is. If you've bought a home and now you're upside down, you can't easily move like you would be if you were a renter. And so lots of people don't move where the jobs or they won't take a job opportunity because they can't sell their home, or they can't easily get out of the situation. Or they move, and they rent the home. And then that creates all kinds of other issues. So, you know, I'm still a big believer in homeownership. Obviously, I've been a homeowner since my, you know, second year (laughter) out of college. I just believe that you need to take it slow, understand what it means. And you need to be very careful before you buy a home.

ARNOLD: And Elizabeth says, too, especially when you're young, it might make you a lot happier to be spending the money in other ways. And in the end, Eulora's thinking now that she's going to sell her condo and maybe go teach English in Thailand or something and just go have an adventure.

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ARNOLD: OK. So renting gives you flexibility. But over time, you're going to pay a really big price for that flexibility because the truth is - anyone who's rented knows about this one. Rents always go up, right? I mean, inflation alone, over time, pushes rents up a lot. Plus, if a neighborhood you live in gets trendy, the rents can go through the roof. But if you own your home and you get a fixed rate mortgage, that monthly payment is a fixed cost. It does not go up. Alanna McCargo says that's really good for just your peace of mind. And it's even better because as inflation rises and those rents go up, that effectively means that it's getting cheaper and cheaper to pay your mortgage payments and live in a house that you own.

MCCARGO: It's part of just a stabilizing force in people's lives to understand and know what you're going to need every single month. That's all fixed, and then you can kind of live the rest of your life around that. You always want to be doing that within your means. But I - it's absolutely critical that people think about the stability that it brings. Not to mention every single month, you're paying something down every time you make that mortgage payment, meaning you're building into the equity that you have into the home and reducing your debt load. And at the end of the day, that means you're building your asset.

ARNOLD: So that's takeaway No. 4. Your rent will always go up, but owning with a fixed rate mortgage gets more affordable over time.

And you can play around with the numbers with all this, using rent-versus-buy calculators online. Motley Fool, The New York Times have pretty good ones, and you can imagine different scenarios. Like, what if I stay here five years or seven years? But just take all this with a grain of salt on those calculators because they ask you to make assumptions about the future rate of inflation and, what's the rate at which your home value is going to appreciate? And it's kind of impossible to predict that stuff, but you can get a ballpark sense.

And one classic rule of thumb that's a lot less complicated than that - don't buy a house unless you plan to be where you are for at least five years. Basically just the cost of selling and moving and everything - it's not worth it unless you're going to be there for five years or more.

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ARNOLD: Now we're going to do a little myth busting here because we heard from some of you who want to buy a house but you're discouraged because you're thinking you don't have enough savings and it's just not realistic. Seth Paddock is a public school teacher in New Orleans, and he'd always heard this thing. He'd heard you need to save up 20 percent for a down payment before you can buy a house.

SETH PADDOCK: Yeah. I'd always assumed the 20 percent. Then you hear a lot of things about public school teachers can't afford homes. So I kind of just put it out of my mind that I could buy a house - you know, I assumed I couldn't buy a house. You go onto a mortgage calculator website and it immediately puts the down payment as 20 percent when they do the little calculations for you.

MCCARGO: So 20 percent down payment is a myth.

ARNOLD: That's our fifth takeaway. You do not need a big down payment to own a home.

Seth actually had a - kind of an aha moment about this when he found out that another teacher at his school was buying a house.

PADDOCK: A fellow teacher, one day, had to step out of a meeting because he had to take a phone call. And he came back in, and I said, you know, everything all right? And he had a big smile. And he said, yeah, I just got preapproved for my loan. And that got me thinking, man, he's the same age as me. We have the same job. We live in the same city. I should be able to do this, too.

ARNOLD: Alanna says the reality is, especially with home prices having risen so much in so many areas, almost nobody is putting anywhere near 20 percent down these days. And you absolutely do not have to.

MCCARGO: Most people, on average, are putting down 5 percent. And I will tell you that there are so many more options now when you're looking for a mortgage for a low down payment. The Veterans Administration, the VA loans - if you're former military, you can get a 0 percent down mortgage loan. If you do an FHA loan, like I did when I bought my first house, you can get that for 3 1/2 percent down. Fannie Mae and Freddie Mac have programs now for 3 percent down.

ARNOLD: Alanna says there are first-time homebuyer programs with really good deals on mortgages. There might even be free grant money to help with the down payment or closing costs. I mean, free money - that might seem too good to be true. But these programs do exist because cities and towns want people to move there and settle down and invest in the community, get jobs, put money into their local economies and all that stuff.

And Alanna says these programs are a really big help for young people these days because they've got to be dealing with student loan payments and the high cost of housing.

MCCARGO: It's really hard for you to do anything besides pay your rent, buy some food, pay your bills - onto the next month and do it again. But there's no room for saving. And so it's really important to just, you know, keep that in perspective - why these down payment assistance programs and helping with cash to close and - you know, are viable options for people in markets all around the country because people are having a really hard time saving in traditional ways because of their rent.

PADDOCK: Yeah. I got stuff so important 'cause it does make you realize, OK, maybe this thing isn't impossible - this buying a house.

MCCARGO: That's right.

ARNOLD: In Seth's case, he put about 5 to 7 percent down, he told us. And he found a house that he likes in New Orleans, and it worked out. He ended up buying a pretty cheap duplex. And he rents out the other unit.

PADDOCK: Yeah. It feels good to come home and open up the door and have my own place and know that I'll be there for a while. And it also feels pretty darn good on the first of the month when you get your rent payment that you know is going to pay for most of your mortgage yourself.

ARNOLD: And Alanna says, look. Be creative like that. I mean, buying a duplex gives you some rental income. Her son, who lives in Houston, is managing to bring in a lot of rental income.

MCCARGO: He bought a four-bedroom home, and he's got roommates that are paying every single month that cover the entire mortgage so he's not paying the mortgage. He's really just paying the utilities.

ARNOLD: I mean, that's super smart, right? I mean...

MCCARGO: Yeah.

ARNOLD: ...He's the guy. He's living for free, and he owns the place.

MCCARGO: It's great. It's great.

ARNOLD: And another thing to think about as you consider renting versus owning a place, flexibility can be nice. But also think about how important it is to you to be able to stay in your house if you want to stay in one place. We talked to Elizabeth about some of the thorns involved in homeownership. But for her, the ability to stay put long term was actually a pretty big upside.

Oh, and let me ask you, too. And so it sounds like you do own your own house.

ELIZABETH: I own a two-bedroom condo, yes.

ARNOLD: OK, and knowing what you know about how buying a house doesn't necessarily make you happy, why did you buy a house?

DUNN: Well, I mean, I want to be clear. I don't think buying a house makes you less happy, right? So the housing market was such in Vancouver that, every place we rented, we would get kicked out of really fast because the owner would want to sell it in the hyper-hot housing market. And so having to constantly pick up and pack our belongings at times of year when we were busy doing other things was also, like, a really terrible way to spend our time. So we wanted to buy a place basically just so we wouldn't constantly be getting kicked out.

ARNOLD: And that's our final takeaway, No. 6 - that sense of security can be a very big deal. For Michelle (ph), after all the financial and practical considerations and input from her grandmother who took her in when she was a kid, Michelle was actually kind of surprised by the profound sense of both security and accomplishment that she felt from buying her own place.

MICHELLE: I'd been raised by my grandmother. And the circumstances in which I came to live with her were not great. And so I was always sort of under somebody. You know, I didn't have a lot of my own, I guess is what I'm trying to say. And so when you're not raised by your parents, and even though my grandmother was very loving, I never quite felt like it was my home because she had took - taken us in under, you know, really bad circumstances.

And so when I bought my first place - my condo - it did feel like, this is mine. Nobody can, you know, ever force me out. I'm not going to end up in foster care. And there was a lake across the street. And I bought a little rescue dog, and I'd walk him around the lake.

And when I'd walk him around the lake, I was thinking, wow. This is super cool that this kid who was thrown away and almost ended up in foster care, and here she is - you know, at 22, I own my own home. So it - there was a great deal of satisfaction and pride that I had done this against all odds.

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ARNOLD: So homeownership - like Michelle just shared with us - can be really profound, rewarding. And you know, at the same time, it can also be expensive and a lot to deal with if you're not ready. So to recap some of the most important points so you can make the right decision for you, here come the takeaways.

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ARNOLD: First up, owning a home can have tremendous financial advantages over time.

MCCARGO: Homeownership is the No. 1 way to build wealth in America today.

ARNOLD: But here's our tip No. 2.

DUNN: Buying a home in itself won't necessarily make you happier than renting.

ARNOLD: No. 3, renting gives you a lot of flexibility, say, to move to get a better job, but - and this is takeaway No. 4 - rents always go up.

MCCARGO: Ownership really does give you more fixed certainty, in terms of your costs month over month and year over year.

ARNOLD: Our next tip, No. 5...

MCCARGO: You do not need a big down payment in order to purchase a home in America. There are low down payment products and down payment assistance programs that can really be helpful.

ARNOLD: And finally, our last takeaway, No. 6 - the sense of security you can get from buying your own home can be a really big deal.

(SOUNDBITE OF MUSIC)

ARNOLD: For more LIFE KIT, check out our other episodes in this guide. We'll take a look at the best way to go house hunting and find a place that you'll love. We'll also take a look at how to get the best deal on a mortgage. And there are ways out there to save you thousands of dollars a year if you know where to look. We'll talk about how to find the best home loan for you.

If you like what you hear on LIFE KIT, make sure to check out our other guides at npr.org/lifekit. And while you're there, subscribe to our newsletter so you don't miss anything. We've got more guides coming out every month on all sorts of topics. And, as always, here is a completely random tip, this time from NPR's Pam Fessler.

PAM FESSLER, BYLINE: My tip is about how to remove red wine. So this happened a few years ago. We spilled red wine all over the white couch, went and - first thing we tried to do was put salt on it, which I had heard. Nothing happened. Then we used club soda, put that all over it. Nothing happened.

We didn't know what to do. I figured the couch was wrecked. And my husband said, I think white wine takes out red wine. So we said, oh, you know, what have we got to lose? We poured white wine all over the couch. It disappeared. It was like magic.

ARNOLD: If you've got a good tip or you want to suggest a topic, email us at [email protected]. LIFE KIT is produced by the very fabulous Sylvie Douglis, Alissa Escarce and Chloee Weiner. Meghan Keane is the managing producer. Our digital producer is Carol Ritchie, and our project coordinator now is Clare Schneider.

Music by Nick DePrey and Brian Gerhart (ph). Our project manager is Mathilde Piard. Neal Carruth is our general manager of podcasts. And the senior vice president of programming is Anya Grundmann. I'm Chris Arnold. Thanks for listening.