Is Buying a Home or Renting Right for You?

Moshe A. Milevsky, Ph.D.

According to the Survey of Consumer Finances (SCF), the personal residence represented fully 85 percent of a homeowners’ financial net worth in 2007. For the general population under the age of 35 (not limited to homeowners), homes represented fully 220 percent of their net worth (and because this statistic includes all people, not just homeowners, it probably understates the mortgage debt held by under-35 homeowners). For people over 65, homes represented between 34 percent and 40 percent of their financial net worth.

These are big numbers, and they’ve been getting bigger over time. Over the last two decades, housing has become a much larger portion of the personal balance sheet. ...