By KRISTI BAILEY

Have you ever heard someone say they rent because they don’t want to be saddled with a mortgage in these uncertain economic times?

Step back and think about it. Unless you’re living rent-free with your parents or another relative, it doesn’t make any difference whether you’re buying a home or renting. There’s a mortgage involved. The difference is homeowners can build equity and pay that mortgage off. Renters are paying their landlord’s mortgage, and the rent never ends.

Here’s another fact of life, as explained by the folks at Entrepreneur Magazine in “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 promos touting the luxury apartment home lifestyle, doesn’t it?

According to the number crunchers at Best Places, rents for three-bedroom apartments and homes in our area range from about $950 to $1,600 a month. Surf the for rent ads and the top end of that range gets closer to $2,000 a month.

According to Attom Data Solution’s Q2 Home Affordability Report, the average payment on a median-priced home in the four-county Kingsport-Bristol area was $876. In the three-county Johnson City area, it was $1,031.

Just that simple comparison comes down on the side of homeownership. But there are other considerations.

The rule of thumb for how much a person should pay for housing tops out at 30 %. Paying more means you’re “housing stressed.” And housing data show there are a lot more “housing stressed” renters than homeowners.

According to Census reports, 49 % of Johnson City metro area renters pay 30 % or more of their income on rent. Kingsport-Bristol renters fare a little better. Only 41.8 % pay 30 % or more. Unfortunately, Census doesn’t have a 31 % or more category, but experts say most renters pay 31 % or more.

Yes, there are housing-stressed homeowners. In the Johnson City area, we’re talking about 24.9 % and 24 % in Kingsport-Bristol  

Here’s another 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.

Reports that calculate whether it’s cheaper to buy or rent and renting are beginning to come down on the rent side here in the Tri-Cities. That’s because our booming housing market has resulted in some tidy price appreciation for owners and higher home prices that have grown faster than salaries. But at the same time rents are also increasing. And the latest reports show rents are growing faster than mortgage payments.

All this is food for thought as we approach the recovery from the initial effect of the coronavirus. Yes, inventory is tight, which means finding the right home can be as much of availability as an affordability issue for some buyers. And a big yes to the reality that the area needs more affordable housing.  But affordable housing opportunities are out there, and partnering with a professional Realtor® who keeps his or her finger on the pulse of listings and other market conditions is the best way to get a first shot at the opportunities.

NETAR is the voice for real estate in Northeast Tennessee. It’s the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.