Renting Is The New Owning
My colleague Diana Olick has a great column up today about the end of the ownership society in American cities.
She notes that its not just inner-city, low-income types who are renting, renting is now much more acceptable to affluent young workers.
Let me say that in my experience, Diana is absolutely correct. Not so many years ago, it was quite common to find young people bragging about how they had bought a place. Pointing out that the place they bought was smaller than the one they could have rented for the same monthly cost or that they had moved into a severely uncool neighborhood was considered out of bounds.
These days I rarely hear the bragging of the buyers. If anything, people at parties tend to be a bit insulted by the notion that they'd buy a place. Its like calling someone stupid.
Of course, the contrarian in me should point out that back when the buyers were bragging was the worst time to buy an apartment in New York City. And now that the renters are proud of their frugality, it might well be wise to buy if you can afford to buy a place that you can live in for at least a decade.
Unfortunately for those of us tempted to buy in this market, interest rates are still so low that its hard to tell how distorted the housing market is. Perhaps prices will rise in the future, which would make it possible to exit a home you purchase now. But once interest rates start climbing, the housing market could fall apart all over again, leaving you trapped in the home for a long, long time.
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