In some areas of the country, you can buy a house for about what you will pay per month to rent an apartment. Even so, it is likely that your rent will go even higher when your current lease expires. What’s up with that!? Well, it’s good old capitalism at work - supply and demand with a little profit motive mixed in,
Rents - like real estate prices - are cyclical
Here’s how it works. When there are more people looking for rental housing than there are places to live, owners (looking to maximize their profit like all good capitalists) begin raising their rents. As rents go up, some renters drop out of the market (they decide to go back home and live with their parents or they double up and move in with friends or in some cases they become homeless) so demand declines. If nothing else changed, rents would stabilize at a particular level and the market would be in “equilibrium” - where supply is balanced by demand.
The common wisdom is that making a monthly rent payment, as opposed to making a monthly mortgage payment, is a bad idea, and is the equivalent of “throwing money away”.
However, that is not necessarily always the case, nor is it completely true in all circumstances.
While there are some advantages to buying and becoming a homeowner as soon as possible, there are also numerous advantages to renting, which ultimately make it smarter to rent than to buy.