As a San Francisco resident, I've always intuitively known that buying a house would be a stupid thing to do, but I didn't have proof. This week's Economist has an article doing the math. Given a choice between renting a $2,000 a month apartment and buying an $800,000 house and assuming the buyer sells the house after 7 years, the buyer will be worse off by $120,000 than the renter.
Yes, rent is money down the drain. But property taxes, interest payments, and the potential for your house to lose value are also ways to lose money.
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