Not that I agree with the analysis of the original post, but I want to point out something about the opportunity cost of tying up the down payment ($120K in this example).
Consider the flip side: If rents increase by 5% per year: By choosing NOT to buy, the renter would face a cumulative INCREASE in rents of about 96,000 over a 10-year period. And $229,000 over a fifteen year period. So the TRUE opportunity cost is the difference between what was earned on the $120K investment outside a home and the $120 K down payment “invested” to avoid potential future rate increases.
I believe that the numbers still highly favor the renter in this (over-inflated) rent example. But someday they will not.
