Should You Rent or Buy? The New Math

The 30 minute podcast boils down to the concept of a rent ratio (cost to buy house / house to rent house for a year).

> I was interviewing Mark Zandi, who’s an economist who’s been looking at housing for many, many years. And he said, right now, with current interest rates, he thinks the break even point is about 18. If you can find a rent ratio of 18 or lower, it will often make sense to buy.

> Now, spoiler alert, you’re not going to find a rent ratio of 18 in just about any housing market in the country because housing is so expensive right now. And that’s part of the reason why, for so many people, it really does make sense to rent right now.

Essentially, buy if { cost of buy }/(18*12) < { cost to rent/month }, otherwise rent.

> According to data from the National Association of Realtors, the median price for an existing home — one that's already standing, not new construction — was $387,600 as of November 2023. - bankrate

For the average US home price of $387,600, the recommendation would be to buy if the rent is more than $1794/month.