“You know what, I needed you to say that. I’ve been feeling a lot of pressure and have been hard on myself about it lately.”

What did I say to generate this palpable sense of relief?

Four simple words: it’s ok to rent.

Our society puts a lot of pressure on us to own homes vs. rent. You hear things like: “Renting is throwing your money away.” “Why are you paying your landlord’s mortgage payment for them?”

Listen, I am in the *mortgage business*. I make money when people choose to buy homes, not rent them. So take it from me: it’s ok to rent.

Why am I admitting something that’s against my own interest?

Because it happens to be true. And in the long term, I think I can create more value by giving people sound financial advice on their housing finance decisions instead of pushing products onto them.

Don’t get me wrong - buying a home can be a great decision. But it’s a decision that should be more about what’s right for you in your life rather than a “foolproof pathway to building wealth” that so many would have us believe.

For years, I beat myself up about renting and not owning. But here’s why it made sense to rent and not own at the time:

• I valued flexibility in my life and career
• I wasn’t ready to commit to living in a particular area
• I didn’t want to deal with the responsibilities of owning a property
• I lived in a high cost area

Then at a certain point everything flipped:

• I no longer had as much flexibility in my life (had kids!)
• I wanted to find a place where I could build community
• I found I enjoyed spending time doing projects around the house (got old!)
• I bought in a lower cost area

That last point is pretty important. Check out the chart below from RedFin.

In most metro areas in the US, you pay an “ownership premium” to own vs. rent (the ratio of median mortgage payment to median rental payment). In places like the Bay Area, you’ll pay an ownership premium of 150% to own vs. rent.

For example, San Jose had a median mortgage payment of $11,049 and a median rental payment $4,176 for an ownership premium of 165%. But that’s just the mortgage payment, not the full cost of owning (utilities, repairs, etc.,). You’re probably looking at paying 3x to own vs. rent there at today's rates.

Again, it all depends on your personal plans and your financial situation. In my next posts, I’ll go deeper into how you can run the numbers for yourself when you’re thinking about buying. And why now - believe it or not - might actually be a good time to buy.

In the meantime, if you have your own questions about navigating home-buying in this very challenging housing market - don’t hesitate to reach out to me.