[quote=esmith]Ok, there was a small error in my calculations (I was computing federal tax based on 130K AGI), and I did not include child tax credit because it’s the same in both cases. I also used 2008 tax tables. Using 120K AGI and taking child tax credit into account, I get $15,037 federal tax when renting and $5,217 federal tax when owning. The difference is lower by $80/month.

I do not doubt that you will be able to spend all money that’s left after paying your mortgage. My point is that owning a 650k house does not put you under more financial stress than renting for $2700/month. [/quote]

I might have missed it, but did you account for all that unused cash in the renter scenario? You can argue monthly principal pay-down versus short-term interest earnings, but in a market like this one I feel perfectly comfortable remaining liquid. My household income is no doubt in the lower tier among Piggington users, so that $300 a month is real $ to me.