Millennials and genres claim their penetration of the housing market. But this real estate expert says that “everyone should not be the owner”

“If all your thought is like:” Oh, I should buy a house because I am at this age and that I should buy a house “, I do not think that it is a good reason to own a house,” said Amir Korangy, founder, president and publisher of the real estate information site The Real Deal, said Fortune. Korangy is also an associate professor at the School of Architecture at Columbia University and principal scholarship holder and assistant professor at the Nyu’s Schack Institute of Real Estate.

The search for this year of the mortgage technology company ServiceLink shows that generation Z and generation Y have a “strong appetite for property”, but many had to abandon the American dream due to the cost. Mortgage rates are still in the fork of 6%, and the prices of houses are 55% higher than they were at the beginning of 2020, according to the national index of national prices of cases.

For these reasons, it is often cheaper to rent than buying a house on the housing market today. A June report from Realtor.com shows that rental saves more than $ 900 per month, on average, and that the rental of a house continues to be more affordable than buying 49 of the 50 largest metros in the United States (Pittsburgh is distinguished as the only exception). This is why Koragy pushes “freedom of rental” – especially to have more for your money.

“You could rent a much more pleasant space for yourself than you might have one,” said Koragy. He gave the example of a richer buyer with a budget of $ 3 million, and said that for the same purchase cost of this house, someone could rent a house of $ 5.5 to 7 million at the same monthly price.

“It is simply much more logical to rent,” he said.

There are also many ownership fees for hidden property such as insurance, repairs, land taxes, owners’ association costs (if applicable) and landscaping and external maintenance.

“This is not just the mortgage you pay,” said Korangy. “There is everything added to it. Yes, insurance is not so much, but insurance, when it goes up … it adds up.”

Nationally, owners’ insurance prices should increase by 8% this year, but it is even more expensive to ensure a house in Florida and California, given the higher risks of extreme time such as floods, hurricanes and forest fires.

Building equity at home is not what it was

One of the main reasons for property is the concept of equity strengthening. By buying a house, you will eventually create equity on this property which you can benefit from in the future when, or if you decide to sell the house.

Everything was good and good, people looked at the prices of the houses soaring thanks to the growing demand after the Boom of pandemic housing. The purchase of a house allows owners to build wealth over time by performing mortgage payments to reduce the loan director and increase the owner’s participation in the house until, ideally, that he is detained. Real estate is generally appreciated, which adds to the wealth of the owner.

But now that the market is corrected slowly but surely, the owners have not been seated on the same heap of equity they have been waiting for in recent years. In fact, the assessment of the price at home has been widely flat or fell in the United States; The average American owner has lost about $ 9,200 in equity in the past year, according to data from the Cotality Information Service Company (formerly Corelogic).

Admittedly, Leo Pond, real estate advisor with Four Seasons Sotheby’s International Realty, recently said Fortune It is not a collapse, but “a long -term market correction”.

Korangy said that as long as a person would agree so as not to build equity, rental would be the obvious choice.

In addition, you are not “linked to the market either,” he said. “It means that (you) can resume and leave at any time (you) want it. If something changes (you) are not indebted to this. If something happens to the building, (you) don’t come back to that.

“So there are a lot of goods that accompany the rental, and many people take advantage of it,” he added. “And the fact is that everyone should not be the owner.”

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