While there are many subjective benefits to owning, there are also many for renting. As a white collar professional myself, the ability to easily relocate easily with 30 days notice and not have to worry about selling a house is HUGE. Considering that the tendancy is towards a more mobile labor force and that many people change jobs every few years I think this benefit is quite underrated.
However, we can argue all day about this factor or that factor. Quite frankly I think the equation is just too complicated to work out by pure reasoning… you have to look at the stats as to what the premium historically has been. There are different ways to measure that I am sure, but I bet the consensus estimate is actually quite a bit less than 20% after the taxes/etc have been factored in.
Also, don’t forget that the willingness to pay a huge premium does not imply that a huge premium must actually be paid. The price is set by the marginal buyer (people who are “on the fence” about choosing whether to rent or buy). And while there are certainly some people who would gladly pay a 100% premium (aka today’s buyers) there are also lots of people who are not willing to pay any premium at all after taxes.
The price of a venti Starbucks coffee is not set by the guy who is willing to pay $5 for it, it’s set by the guy who is willing to pay $1.80 but not $1.90.
