How is this number calculated? Home ownership is definitely cheaper than renting over a 10+ year period, thanks to inflation making your mortgage easier to pay off every year.

@nsokolsky it's very easy to make a calculator/run monte carlo sims on historical interest rates, historical stock returns, real estate prices, and rental prices. The only argument for investing in real estate is the leverage which reduces as you pay off a mortgage. Otherwise, the transaction costs/taxes and lower return on real estate make putting your down payment and any money saved after rent into an ETF better in the long run.

The fact that homeowners are wealthier has more to do with the fact that a mortgage forces people to buy-and-hold, than because homes are such a good investment. Most people who don't own homes simply don't save. If homeowners saved as much in ETFs most would probably be wealthier.

@benjaminIkuta do you have a source for the graph?

I don't really understand the question. Could you link to where the graph came from? Maybe that would help me get my head around it.

Or is it just mortgage payments vs rent payments? But then that would depend on the length of the mortgage...

@Fion Idk

@benjaminIkuta well what source do you plan to use to resolve?

@Fion the source of the graph

@benjaminIkuta I thought you just said you don't know what the source is.

What's a homeownership premium? In the UK it's pretty much always been an order of magnitude cheaper to own lol

@TheAllMemeingEye an order of magnitude, really? That's crazy! Why don't more people buy then?

@benjaminIkuta I mean, to be fair I haven't done a rigorous check of all the data, I'm kinda going off vibes and "common knowledge", but the gist I get is that buying is so ridiculously expensive due to housing market inflation in recent decades that people whose families didn't already own a house decades ago basically can't afford the deposit to start a mortgage to eventually own one, so are stuck in a rent poverty trap

@TheAllMemeingEye why not lower down payment? Why don't investors buy houses and rent them out?

@TheAllMemeingEye I think this is confusing "it was cheaper to buy in the past than to buy now" with "it's cheaper to buy now than rent now".

@ShakedKoplewitz I guess what I meant is today getting deposit and mortgage to eventually own > renting > owned home bills and maintainance costs, and it's just occurred to me I'm unsure whether this graph is about the first or third one lol

@TheAllMemeingEye unless I'm misunderstanding, isn't this just saying that now the capital/land values are a larger component of housing cost than maintenance and taxes? Which I wouldn't think would be surprising

@ShakedKoplewitz do you know what the homeownership premium in the graph represents? I admit that's the main confusing factor for me