Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise?

摘要

Homeownership is touted as the "American Dream." It is credited with enhancing wealth; increasing civic pride; and improving self-esteem, crime prevention, child development and educational outcomes, among other benefits. This article does not dispute any of these claims. Instead, this study hypothesizes that crowding toward homeownership raises the price of homes above their fundamental value resulting in the purchase of a home becoming a contraindica-tive action. After setting the holding period to the average American's tenure in a residence, renting (not buying) proves to be the superior investment strategy over most of the study period.