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That leaves millions of Americans living in homes they rent rather than own.
Folks rent for many reasons.
Others rent because they prefer the flexibility and decreased responsibility.
For example,most of Gen Znow say renting is better than owning a home.
Personal finance author and radio personality Dave Ramsey disagrees.
Is It OK To Rent Your Home Forever?
Ramseys video started with a question from a listener about whether its OK to rent your home forever.
She said she rents her apartment in a great city and is very happy with it.
Shes close to work, church and social activities.
To buy a home she could afford, shed have to move way outside her current city.
In this scenario, renting seems logical.
Many other people may find themselves in similar situations where theyre happy renting.
But even so, Ramsey argued that owning a home is preferable at least sometime before retirement.
It sounds like you got it made right now.
The caveat is that Ramsey doesnt think renting works over the long term compared to homeownership.
He noted that rental rates increase nearly every year.
Between 2019 and 2023, rents increased more than30% on averagein the U.S.
Rent increases are now slowing in many places, but Ramseys point aboutrising rental pricesstands.
Retirees often live on a fixed income, relying on Social Security payments, savings or pensions.
Youll likely have minimal housing costs if you own your home outright in retirement.
Even if you still owe money on your mortgage, your housing expenses should be predictable and manageable.
However, for renters in retirement, increasing rental rates can quickly become a drain on their fixed income.
Ramsey said housing is the most expensive line item in your budget.
Comparing Homeownership and Renting
Statistics about homeowners finances compared to renters support Ramseys pro-homeownership stance.
By comparison, renters had a median net worth of just $10,400.
That suggests homeowners are nearly 40 times wealthier than renters.
Renters are also much more likely to rate theirfinancial situation poorlycompared to the average American.
Part of the issue is thatinflation hits rentersharder than homeowners.
On the other hand, renters face rising rent prices that may outpace the average inflation rate.
Over time, homeowners come out far ahead of renters, at least financially.
Youll need to put some money down on the home, though the percentage varies.
Then create a budget that works.
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