Quote:
Originally Posted by photon
Right now buying is probably cheaper than renting because of low interest rates, but historically isn't owning typically more expensive than renting?
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Not necessarily. If low rates spur enough people to buy then the price level for homes goes up and takes out any savings from lower interest rates. Converesely when more people own homes and speculate on additional properties/income properties then there is way more rental stock and way less demand for rentals and hence the rental price actually goes down. In many markets in Canada the Own/Rent cost ratio has never been higher, indicating it being cheaper to rent, despite low interest rates (Mostly because even people with no money 'own' property).
House prices sometimes perform like bonds outside of other factors. When interest rates rise, prices fall and vice-versa. Interest rates aren't really a good barometer of whether or not it's a good decision to buy because it's only one variable.