[quote=AN]
Transaction cost only apply if you sell. You’re, right, there is maintenance cost. If you add that, you should also add appreciation as well.[/quote]

But you can’t realize net equity until you sell right. Even if you take out a HELOC you also create a liability until you sell.

The bottom line is rent vs buy calculations can get tricky. I think you either need to keep it really simple like Mortgage monthly payment vs rent or it needs to be really complicated. In our low rate environment MID is mostly canceled out by Property Tax. Appreciation is probably mostly canceled out by maintenance. Equity build is mostly canceled out transaction costs. It’s only once you get past 5-10 years before you really start to see economic positives in ownership vs renting.

The biggest unknown right now is will rates move higher, how much will they move higher, and what potential effect does that have on the price of homes. In the worst case scenario I could see home prices significantly lower than they are now.