Considering home prices are 50% higher than before the pandemic, mortgage rates remain stubbornly high in the 6% range, and everything feels more expensive thanks to inflation and tariffs, home ownership feels largely out of reach for many younger Americans.
But one serial investor says that opting for renting instead of home ownership may not be as bad of an idea as some people think, despite it being the quintessential American Dream.
“If your goal is to become financially independent at a young age, you probably don’t want to go buy a house—but it’s a very controversial thing to say,” JL Collins told The Diary of a CEO podcast in an episode published Jan. 12.
Collins, the best-selling author of Pathfinders and The Simple Path to Wealth, said the reasoning is simple: Buying a home “dramtically inflate[s]” your cost of living. While your mortgage payment and rent payment may be similar on paper, owning a home ends up costing more in the long run and comes with unexpected expenses—often referred to as the “hidden costs” of homeownership, like insurance, repairs, and updates.
“You have the expenses of maintaining it, paying the taxes on it, blah, blah, blah,” he said. “If you stay in an apartment that is just enough to meet your needs—which, by the way, is what my daughter has done and continues to do—your costs will be lower.”
