Your example has a lot of truths and good things to consider, but it assumes rent will stay the same over a 15 year period. Anyone who rented in 2010 knows this isn’t the case.
Assuming an annual rental increase of 3%, the townhouse that rents for $2,400/month in year one, will rent for ~$3,600 in year 15. While the renter would initially be able to save $1,300 per month vs the buyer in year one, each year the renter would be able to save less and they pay almost equal amounts by year 15. Assuming this person still needs somewhere to live after 15 years, the renter will begin paying more monthly starting in year 16.
It is easy to argue buying a house isn’t a smart financial move for the first 5-10 years, but if you zoom out and look at 15-20+ years, owning a home seems like a no brainer.
But who really makes decisions with 20 years in the future in mind?
What about the ongoing costs for homeowners, like HVAC maintenance, plumbing issues, rising insurance premiums, increasing property taxes, and the cost of repainting walls? For instance, the $4,800 in property taxes in 2025 could easily balloon to $10,000 (Wake County saw a 41% increase in property tax bills from 2016 to 2024). While housing prices have appreciated rapidly over the past couple of decades, we’ve likely reached a theoretical limit. There are only so many households that can afford to purchase a home. Yes, the government may allow a higher percentage of household income to be used for home purchases, but it’s unlikely we’ll see the same rapid appreciation in home values that we saw in the past. Ultimately, as a society, we’ve simply accepted a larger portion of our income going toward housing costs drive primarily by scarcity.
As a long term condo owner, I can add that HOA increases can be as unpredictable as future rent. That said, and despite the condo values rising more slowly than SFHs, I do have a substantial amount of equity that I can tap if required in the future. I guess that I am saying that I can imagine making an argument for either buying or renting. IMO the worst possibly scenario is to own for just a short period to time. If you plan on moving every 3-5 years, or if you think that your life situation will demand a different housing solution, you shouldn’t buy unless you intend the hold the property long term and be a landlord.
Owning a single housing unit is, in most cases, inefficient. Unless you’re seeking something truly unique and cost isn’t a factor, renting remains the most affordable and flexible housing option. I recognize that some view homeownership as an automated savings mechanism, which is why certain rental building groups have tried to introduce ideas like directing a portion of rent payments into “equity.” However, this concept often boils down to higher rents with the apartment setting aside money on behalf of the renter.
The reality is this: homeownership always comes with trade-offs. Sure, you can buy a home in a remote area and enjoy lower property taxes, but that often comes at the cost of poor school districts, limited economic opportunities, slow emergency response times, and dependence on a vehicle for even basic errands. Cars bring ongoing costs for fuel, maintenance, and insurance. Worse still, homes in such areas are unlikely to appreciate significantly because their fungible nature, where one property is nearly indistinguishable from anothers so as to limit value growth.
In urban areas, owning comes with a different set of challenges. The economies of scale for multi-unit operations are more efficient for renters than for owner-led HOAs, which tend to be disorganized and inefficient. Additionally, multi-unit buildings generally don’t appreciate in value the same way single-family homes do, as their value isn’t tied to land in the same way.
Americans are deeply attached to the dream of a single-family home: the nice yard, friendly neighbors, kids walking to school, clean streets, quick deliveries, and access to nearby shops, restaurants, and workplaces. But this idyllic vision of suburbia is fundamentally at odds with reality. The density of suburban living makes it unsustainable without heavy subsidies. High labor costs, rising material prices, and traffic congestion all contribute to the impracticality of designing a place that offers high-paying jobs, walkable streets, and affordable shopping for everyone.
If you look at any “thriving” single-family housing market in the U.S., you’ll notice that it always sacrifices something. It either lacks well-paying jobs and affordable housing, or it’s burdened by high property taxes and expensive retail shops. The math doesn’t add up: the suburban ideal cannot exist without trade-offs, and it certainly cannot scale to accommodate an entire society.
I was watching the city council meeting the other night on YouTube, and there is a parcel that a developer is asking for rezoning up to 700 units just north on 401, up from the US1/401 Split.
I can’t decide what I think about this. The site is surrounded by a bunch of single family homes and is not practically walkable to anything. The only thing that’s offered by the developer that’s walkable is an extension of the greenway trail and a protected walking path across 401 itself. Unfortunately that trail doesn’t seem to go anywhere that might be useful to most people in their daily lives. Strip centers and big box stores along Capital are a mile+ away, but that requires future residents to walk a narrow sidewalk along 401 and cut through a neighborhood. Sure it’s doable, but it’s far from ideal.
I know that available parcels are where they are, but it’s disappointing to see proposed development for 700 residences in a location where surely few will choose to ever walk, and in an area that’s already overrun with cars.
On the other hand, I do appreciate that this development is infill in nature and isn’t pushing Raleigh further beyond 540. I also appreciate the tax base and the density that will earn the city of Raleigh more revenue without having to build a substantial amount of infrastructure. I guess that I am just venting.
If I were making my decision of buying vs renting today, I might come to a different conclusion, but I haven’t bought real estate in 20 years. Frankly, if I knew then what I know now, I would have bought parcels of land in the “outskirts” of Wake County instead and sat on them until retirement! I remember cycling with friends down in Holly Springs when it was little more than a rural crossroads with fewer than 1000 people around 1990.
The creation of the HOLC and FHA maps fueled nearly all of the housing and segregation issues that we have today. The FHA purposefully denied grant funding for black only or integrated housing and mainly funded white only affordable housing post WWII.
Along with this, private banks primarily provided predatory loans to African-Americans who were able to crawl ahead to SFH neighborhoods, which after decades led to 2008. African-Americans represent a large percentage of our unhoused, low-income and other populations mainly due to federal, state, and local governments and private entities disregard for the vague but existing 14th amendment (est. 1868).
While the 700-unit density is promising, it seems that the surrounding area isn’t conducive to creating walkable amenities easily or in the near future that would support such a large upcoming resident base. Factors like the power line easement and the 6-lane road suggest that this could end up becoming an even more defined stroad with some pretty heavy congestion. I would say this project might not serve the community in a way that promotes accessibility or livability.
With the increasing need for more density, it’s important to know that all of our existing/planned local mobility hubs, travel choice neighborhoods (transit accessible areas), etc. would have to be 8 times denser in order to accommodate for the 1.5 million people expected to move here by 2055. Obviously, this is nearly impossible.
I know that’s a long sentence but bear with me. The good thing to take away from this is that currently most newbies are locating in and near dense areas.
Edit to add: I didn’t meant to necessarily respond to @DTRDU 's post when clicking reply.
I didn’t mean to start a whole debate over renting vs. housing but the reason I mainly brought this up to state that owning a house isn’t the only way to building wealth. I think this is an important thing for people to know.
There has been mentions that owning a home is such a big “American” mindset. I won’t say that owning a home with a good interest rate and a fair offer is not a way to build wealth, but there are a lot of instances where people to get loans at higher interest rates or where people will get into competing and pay well over what they originally budgeted for.
I believe a lot of people who cannot afford to buy a home still have an opportunity to build generational wealth, but you need to start somewhere. Jumping into a house with a subprime mortgage causes an illusion that people can build wealth when they have a higher chance of defaulting on a loan. In my opinion this whole idea of “you must own a home to build wealth” is cheating those with less financial standing and not really helpful. I have family and friends who own homes and still struggle with their wealth.
In investing, I find it more approachable because you can start small with minimal amounts of money and develop this mindset of saving/investing money along the way. You don’t need to worry about having to save 20%/$60k before you start thinking you are building wealth. It also teaches you about the importance of your 401k, taxes, and so on as you may start to look into capital gains taxes and what your 401k is actually doing. I’ve seen where people will pull from their 401k and incur the 10% early withdrawal fee just because they feel that buying a house is a great investment when they’ve lost some of that investment because of the fees and taxes they just surrendered.
In general there are a lot of variables that drive building wealth such as personal habits, so I do find renting vs owning to be inconclusive. Both are ways that can build wealth.
You also have the reverse where people tend to spend more on a house that may actually be more than they can actually afford. On top of that, having your own house means you can spend money on things such as renovations which may not increase the house value.
So the forced savings is not exactly true. It depends on the person/people. Same goes with investing, so it’s not housing only. People may see returns on investments and pull money out because it’s liquid.
Personally I can see a house being an asset assuming you don’t go spending more than you can afford and are able to get a good deal/interest rate. If you start spending money on renovations which doesn’t contribute to the value of a home, then it’s costing you money. If it does add value, you’ve also increased your property taxes.
As far as relocation, I don’t link that is solely linked to homeownership. Whether you have $1Million from a home sale or $1M from a 401k/brokerage, if you move from a high cost of living place to a lower cost of living place, your money will go further.
My responses above are more on building wealth and less on the redlining of the area. So please do not mix the two up. It’s more on a response to this idea that in order to build wealth, you must own a single family home. Considering that there are not many “reasonably priced” single family homes in downtown Raleigh, then an argument can be made that in order to become wealthy you must live in a suburban/rural area far from town and drive to work (assuming you work in downtown Raleigh). That mindset causes sprawl (to keep this on topic ) .
It is still very possible to rent in an urban environment and still become wealthy.
Not sure if there’s a right thread for this, but NCDOT is talking tolls for Capital Blvd construction. Seven years ago, the project was supposed to cost $465m. Now they think it’ll be $1.3b.
Yeah they break it out between Section A (between I-540 and Durant and Perry Creek roads - $516m), Section B (through Burlington Mills), Section C (through 98), and Section D (to Harris and Purnell in WF.
I found a rendering of the proposed Capital Boulevard roadway expansion to alleviate congestion in Raleigh north of downtown: (they probably will need to make it a toll road to pay for it!)
I also heard a rumor that they are going to put in one of these drive thru Chick-fil-a’s at one of the 4 lane side streets. They are going to need residential areas to decrease impervious area to 25% to allow for all the asphalt and concrete surface area!
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