Real Estate 100 -- Rent Vs. Buy

Owning a home is considered the American Dream but it may not be realistic for some. In some cases, as the subprime lending mess illustrates, it is fiscally imprudent. In other case, it is may be a waste of money -- as in a bad investment.

Bernard Markstein, director of forecasting at the National Association of Home Builders, and Christopher Thornberg, Beacon Economics principal, faced off to discuss the subject with CNBC's Liz Claman.

Thornberg says "when you add it up from top to bottom" -- down payment, mortgage, taxes, maitenance etc.,-- "clearly renting is the cheaper option." For a brief time during the housing boom of recent years, ownership was attractive because riapid price appreciation led to greater home equity and thus a fatter profit upon resale.Thornberg sees no further price appreciation until the end of the decade and indeed expects prices to continue to fall in many major markets.

Markstein says most people buy homes "because they're a great place to live," adding that price appreciation on top of that "is just extra." Markstein does see the chance of further price appreciation in some markets in the short term.

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