I haven’t run the numbers but I would expect to have seen a pretty similar spread between renting and owning when I first bought in ’91 if all this crazy creative financing was available back then.

DaCounselor – I showed the actual numbers comparing 2001 to today above, not 1991. However, I would agree that comparisons of rent versus own were likely very similar between about 1990 and today. (I think I saw a graphic on this board once that actually supports this notion. I’ll try to find it.)

Regarding the 50% discount before tax considerations …
As I said, the after-tax consequences can result in renting costing anywhere between 50% of buying and 85% of buying, depending on individual tax circumstances
Example 1: Married couple making 75K per year, with a 200K loan (e.g. 250K condo). Their total interest might be about 13K in the first year, prop tax at 3K for a total of 16K. Thats only 6K more than they get for a standard deduction. If their marginal tax bracket is Fed= 25%, state =6% they get a benefit of owning of $1860 per year .

Example 2: Married couple makes 250K per year, with a 800K loan on a $1Mil house. Their total interest is 52k, prop tax is 12,500. Total deductions are 64,500. Well above the 10K standard deduction. Plus they are in a higher tax bracket, say a marginal rate of Fed=33%, State = 9.3%. Their tax benefit relative to standard deduction is: (54,500*0.423) about 23k per year .
The couple with the 4x more expensive place have a 12x larger benefit from owning. In this case, the relative cost of renting versus owning might be as high as 90%.

In fact, for higher income folks, a mortgage of up to $1 Mil may even keep them from being subject to AMT. Because a Primary mortgage is still deductible under AMT (but property taxes are not).

Because of the non-linearity of the tax code, it is impossible to cite a single number for after tax cost of renting versus owning.