Rent or buy? Ownership is best long-term economic option  

Rick Chantry 

Rent or buy? The question keeps coming up because home prices have increased so much and there’s so little inventory. But rents are also rising. There are ample local examples of double-digit rent increases. And, it’s not uncommon to find waiting lists at some local apartment complexes.

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We’re in an era when local housing demand is higher than supply – even when home prices and rents are increasing faster than wages.  

Current reports show ownership is typically a better option in counties with less than 500,000. Since none of the local counties weigh in at that level, ownership gets the edge in that test. And that’s just one data-oriented example.  

Think about it. Unless you’re living rent-free, it doesn’t make any difference whether you’re buying a home or renting. You’re paying for the roof over your head. The difference is homeowners can pay their mortgage off. Renters are paying their landlord’s mortgage. And the rent never ends.  

Here’s another fact of life, as the folks at Entrepreneur Magazine explained in the classic article, “12 Practical Steps to Getting Rich.” 

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.” That takes some of the sizzle off the luxury apartment home lifestyle, doesn’t it? 

The Census Bureau offers additional hard data about the difference between renting and homeownership. 

The current report says the median rent in the three-county Johnson City Metropolitan Statistical Area (MSA) is $734, $678 in the four-county Kingsport-Bristol MSA, and $618 in Greene County. That means half of the renters pay more than the median and half pay less. Many are paying more. And if you’re looking at three-bedroom homes, the rent range from $1,500 a month and up.  

According to the most current data, renters in Bristol, Greeneville, Johnson City, and Kingsport use half or almost half of their income on rent. Elizabethton renters have the better, but still less than ideal, deal. Only 40% are paying more than a third of their income on rent.  

The rule for how much a person should pay for housing tops out at 30%. Paying more means you’re “housing stressed.”  

Here’s another thought. The more a person spends on housing, the less disposable income they have to participate in an economy driven by consumer spending. 

Here’s still another economic fact of life to consider. A mortgage is a form of forced saving for the owner. It’s a saving that allows them to build equity that can be tapped into later in life. Renters guarantee that the landlord gets the equity. And the rent never ends. 

All this is food for thought as we enter the spring home-buying season. Yes, inventory has hit rock bottom. Finding the right home can be as much of an availability as an affordability issue, and there’s a good chance there will be multiple offers. It’s a very competitive market, and the best tactic is to partner with a professional Realtor® who keeps his or her finger on the market pulse because ownership continues to be the best economic option even in a strong sellers’ market. 

NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,800+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at