I always consider paydown on a home when I run my numbers. But to try and keep things apples to apples I go back to more of an interest only model. Therefore I turn the House as a capital cost into shelter as an operational cost. Additionally, the interest rate environment that we are currently in make it less opportunistic IMO to pay down the mortgage.
With respect to rising rents I personally am not seeing it. I have lived in the same apartment for 5 years and have not seen a rent increase. I also do not confront the difficulty of transaction costs which I typically either marginalize in the models that I use or include tranaction costs in the capital costs.
What I do find tough about renting is that there are things that I would like to chage about the place and I am reluctant to put money into something that has 0 return. Therefore you have to accept a “make do” mentality. From that standpoint there is definitely some psychological value to owning and controlling your environment. But this only becomes a factor as the rent buy speads get closer together. Right now they are still pretty far apart.
