Renting Vs. Buying: Why Home Ownership Ain’t All It’s Cracked Up to Be

With the rental market red-hot, finding an apartment in Philly has never been tougher. Which raises the question: Is it really time to buy, or is home ownership a bygone national ideal? One woman attempts to find the answer (and, maybe, a weekend place).



Yellow. Yellow. YELLOW! The desire hits suddenly and hard, with an intensity that falls somewhere between my craving for morning coffee and an addict’s for heroin. Just like that, all I can think about is painting the bathroom in our small Fairmount apartment. It’s not always the bathroom, nor is it always yellow—sometimes it’s the kitchen, and it’s SUBWAY TILE or WALLPAPER WITH LITTLE MONKEYS ON IT—but the urge in my renter’s heart to a) obtain a house of my own and b) do pretty stuff to it comes over me with increasing regularity these days.

As a 32-year-old American “property virgin,” in HGTV parlance, I am regularly assured that these primal-feeling house urges are perfectly natural. So natural, insists one home-owning friend who knows about such things, that it’s actually my biological clock sounding its pre-baby nesting alarm. (“Eh,” I reply.)

Biological imperative notwithstanding, there are plenty of reasons the siren song of homeownership might suddenly be calling to me after more than a decade of renting. The first probably has to do with the growing cultural obsession with home makeover shows: According to the New York Times, HGTV draws an average of 1.3 million viewers during prime time. No big shakes next to, say, ABC’s 8.3 million, but still more than enough for the network to launch HGTV Magazine at a moment when nobody is launching new magazines. With the same gusto that we once recapped episodes of Sex and the City, my friends and I now debate the benefits of granite vs. butcher block, as seen on Property Brothers.

There’s also the long-held conventional wisdom that renting is throwing away one’s money while buying is, to quote my high-school economics teacher, an investment in oneself. And there’s Wharton-trained economist and Econsult veep Kevin Gillen, who tells me that in Philadelphia proper, I could wind up paying less monthly toward a mortgage than I spend on rent—especially­ now, when Center City’s rental vacancy rate is barely a sliver, at 1.8 percent. Midway through 2009, it was 7.6 percent. Landlords are the new real estate moguls.

Last, but not at all least, is the overwhelming power of the Great American Dream home-owning narrative, peddled by everyone from Walt Whitman (“A man is not a whole and complete man unless he owns a house and the ground it stands on”) to Suze Orman (“Owning a home is a keystone of … financial affluence and emotional security”). Fannie Mae couldn’t ask for better marketers.

And so, be it natural or nurtured, the decision to buy a home was, for people like my husband and me, always a given. We have two jobs between us, and relatively stable incomes. We like Philly. Putting down roots is supposed to be what people like us do. But now—for us and heaps of other­ American Dreamers—the urge to put down roots has come along just as those supposed to’s seem to be shifting. The headlines since the housing bubble burst in ’08 might veer toward the hysterical, but they pretty much capture the vibe out there:

“The New American Dream: Renting” (Wall Street Journal). “Renting: The New American Dream?” (MSN). “Census: American Dream of Home Ownership May Be Gone for Good” (the Associated Press). “The New American Dream: Rent, Don’t Buy” (the Fiscal Times). “White Picket Fence? Not So Fast” (New York Times). “The American Dream of Home Ownership Has Become a Nightmare” (U.S. News & World Report).

The numbers behind them aren’t particularly encouraging, either: According to Gillen’s quarterly housing study, the value of homes in Philadelphia fell 2.4 percent in the last quarter of 2011, bringing us to a total drop of 18 percent since the bubble burst. We’re 36 percent below our historic average when it comes to houses being bought and sold.

The downturn changed our focus on homeownership. It reminded us, Gillen says, that a house is first and foremost a place to live, not a moneymaker. But it strikes me that more than just our focus has changed. We’ve begun looking at homebuying through an entirely different lens.

If anything, the broken economy has made my husband and me all the more grateful for the life we lead. When our heater stopped heating, we didn’t spend a nickel—we called the landlord. When our roof leaked, I laid out some towels, then wrote an email. We adore our block, a tree-lined version of Philly at its very best. We rent for a relative song on a street where we could never afford to buy.

I think we who find ourselves considering real estate in the hangover of the nationwide house party still have options. (Well, most of us.) My husband and I could move a little further north into the hinterlands of Fairmount/Temple­ and buy a cute little place we could afford in this buyer’s market. We could change our lives a little, spend a substantial chunk of our savings. And then we could paint anything we damn well please. But the question isn’t really if we can, or even if we should.

The question is: Aside from wall color, why would we want to?


This is my 39-year-old friend Hannah, talking about the condo not far from Spring Garden in which she and her husband have spent the past six years. “The night we closed, I told Greg I didn’t even want to go there to see it.”

Hannah is one of the smartest people I know—even more than that, she’s supremely decisive. Steady. A non-waffler. So I’m taken aback when she tells me that she and her husband Greg dream of the day when “we can just sell the place, have money in the bank and rent again.”

Walking down Walnut Street one sunny day, Hannah rattles off all the things she and Greg have done to the place. These include installing hardwood floors; remodeling two bathrooms; re-tiling the fireplace; painting everything; installing new pocket doors and window treatments; replacing outdated track lighting and the hot-water heater; and designing and picking out “every fixture, appliance and surface in our kitchen, which was gutted to the studs.”

She’s happier with the house than when they moved in, she says, “but you’re never really done. I’d say there’s still about five major things that bother me, and a dozen little things.”

The takeaway here haunts me: While I sit flipping through the stack of old Domino magazines I keep like a hope chest of homeownership, Hannah’s a few blocks away, knee-deep in spackle, daydreaming about a high-rise rental with a doorman.

Now, Hannah isn’t necessarily the norm. Many of my other homeowner friends regale me with the benefits: the equity; the comforting constancy amidst changing jobs, lovers, friends; the sense of community; even the self-satisfaction of becoming a competent DIY-er.

“I am 100 percent glad we bought,” says 33-year-old Adam, who recently purchased a house—his first—in Graduate­ Hospital. This is a bit of a surprise to me, if only because Adam’s partner, Ryan, just landed a job in another city. They’ve moved something like six times in 10 years, and now, a little more than a year after paying hundreds of thousands for a slice of permanence, they’re going to end up leaving the place.

“I mean, yes, this happened faster than we wanted,” Adam says. “We didn’t necessarily plan on being here for 10 years, but we did hope it would be longer than a year and a half.” Still, he says, shrugging, they can rent the place out for a while until home prices go up a little. It’s been worth it to him as a life experience, he says—he likes the way roots feel. He’ll almost certainly buy again after they sell. Eventually.

Roots are, for some, a tricky thing. I’ve moved 10 times among five states in 13 years; until I married my husband last October, I had no reason to think I wouldn’t continue migrating. But in this, I’m something of an anomaly: Americans are less transient now than we have been since 1948—and possibly before then, since the census only started tracking our mobility that year. A mere 11.6 percent of us changed residences last year, no doubt thanks in part to the cruddy job and housing markets. In 1985, 20.2 percent of us did.

My husband, in contrast to me, is a born-and-bred Philadelphian who left only to attend college. Expecting and craving fixedness, he purchased a house in the suburbs right before we met. When he bought, he thought he’d stay there for at least five years. But when it came time for us to move in together last year, it made the most sense to rent out his house and live in the city. Today he’s in the somewhat bizarre position of being both a landlord and a lessee.­

Like Adam, my enterprising husband absolutely reveled in the feeling of ownership­ … at first. Like Hannah, some years later—and poorer, having dropped massive sums of cash on French drains and basement floors and new garage doors at the place in the ’burbs—he prefers his lessee role. After a year of deliberation, we’ll most likely have put our suburban house on the market by the time you read this.

To be totally honest, even if that place sells and we suddenly find ourselves awash in liquid assets, diving headlong into the process of house hunting and acquiring a mortgage is largely unappealing. We don’t have any real plans to buy another place—although we toy with the idea of getting a cheap hideout in the country somewhere (we call it our “low-mortgage getaway”) that will allow us to both own a small piece of something and live our free-and-easy city life.

“Wait, so you’d have two houses?” my mother says incredulously when I share this fun but highly improbable plan. I tell her it’s just our little fantasy about having it all without the fear of sinking everything into one house. Real estate à la carte.

I’m sure that to her—and to any boomer who lived a chunk of life in that pre-bubble time when people bought and sold only when they needed to—all this noise sounds like the whining of a generation historically spoiled by too many choices—the hesitation of people over-attached to freedom from responsibility. But I actually think that in a post-bubble world, “having it all” just looks different than it used to.

When Michael Ford, founding director of Xavier University’s Center for the Study of the American Dream, conducted a national survey about what exactly that dream entails these days, only seven percent of respondents ranked “homeownership” as their first or second definition. “Homeownership,” Ford concluded, “is more important to special interests [who profit from it] than it is to most Americans, who, according to our research, care more about ‘a good job,’ ‘the pursuit of happiness’ and ‘freedom.’”

Emphasis (mine, not his) on the freedom part.

AND STILL, THERE IS ONE THING about the idea of owning a house—well, one thing beyond the YELLOW—that won’t leave me alone. It comes from my 48-year-old friend Mark.

Honest to God, Mark’s story should be all the home-buying deterrent anybody would ever need. It isn’t just depressing; it’s Lifetime-movie tragic, and begins with the 150-year-old house he bought in a charming New Jersey river town in 2005. He put a substantial chunk of cash into various renovations. Then the bubble burst, leaving his home’s value about $140,000 less than what he’d spent on it over the years.

When Mark landed a new job in another state, he rented the place out, hoping that a few more years might see home prices rise again. Then last year the basement flooded (for the third time in five years), and he spent another $13,000 on the damages. He also went on blood pressure medicine and anti-anxiety medication. Underwater in both a literal and figurative sense, Mark went so far as to meet with a bankruptcy lawyer last fall. For now, though, he’s taking one last shot at selling the place, at a considerable financial loss.

“I am broke because of this house,” he laments. “This house is literally killing me.” Even in dry weather, he obsessively checks the flood reports for the Delaware River, and he’s despondent over the fact that not a single similarly priced home in his adorable town has sold in the past year.

Mark’s one saving grace in all of this is the Shore house he owns with his brother, which he sees as “a sort of insurance against landing in a nursing home when I’m old because the income has stopped coming in and I’ve got nothing else.” If it weren’t for that place, he’d feel like he had to buy again despite his obvious reluctance, if only to secure his long-term future. “Who wants to be paying rent when they’re 80?” he asks.

His words start a domino effect of panic in my brain. If home-buying is, as they say, like a ladder, and each rung propels you to the next rung to help you get to the next stage in life, am I making a mistake by not just climbing on now, when prices are so low? About two in three Americans think that now is a good time to buy a house, Gallup reported last spring. Local real estate honcho Allan Domb gushes over the opportunity buyers have now to lock in “ridiculously low” interest rates, the lowest in 60 years. Am I just postponing my ultimate reality of buying, and if so, should I get on with it while the getting’s good? Are we going to regret our current choices when we’re 80?

Forrest Huffman is director of Temple University business school’s real estate program. He’s also from South Carolina, and both his softened Southern vowels and his words have a calming effect on me. “Hey, falling house prices can help certain groups, such as first-time homebuyers,” he says. “If you buy it, buy it to live in it, not to get rich. If you want to avoid the hassles of ownership—the taxes, worrying about the school district and the neighborhood, the upkeep—rent. You won’t build equity, but you also won’t lose it.”

Huffman’s whole real-estate philosophy seems equally practical. “You just can’t look down the road and say, ‘Hey, if I want to move and sell, then we’ll make money off it,’” he says. “That’s not necessarily an option anymore. People need to start looking at houses as a useable asset. The questions are, ‘Do I want to buy, and is it affordable? Will I stay there for five to 10 to even 15 years?’”

I think about an old book-club buddy, a 33-year-old interior designer who could easily have afforded to buy in Center City but instead remained a devoted renter. “When it’s time to go, I can run so fast,” she said. “I have temporary wallpaper. Best of both worlds.” She has since moved to New York.

Put in this perspective—committing now to a middle school for our unborn progeny vs. committing to temporary wallpaper—­pretty­ much brings things back to the original appeal of the rental. It also sort of validates something my friend Jennifer said recently: “The era of the starter house,” she opined, “is over.”

Jen is 42, owns her own small business, and, with her husband, bought her first-ever house in Riverton, New Jersey, about a year and a half ago. After being turned down for their first mortgage despite having perfect credit (ah, the world of post-crash banking), they were approved for a loan on their second try and have remained blissfully happy since move-in day. Jen loves the control and the permanence, and she pretty much lives for the DIY projects. “There’s not a surface of this house that hasn’t been touched by a paintbrush,” she says brightly. She doesn’t plan to move. Ever.

“We were first-time homeowners in our 40s,” she says. They’d been to New York to grow their careers; they feel they’ve had the chance to do “everything.” They don’t suffer from wanderlust anymore. They are … home.

“Maybe,” Jen suggests, “you’re still too young to buy now.”

In fact, remarks Kevin Gillen, thanks to the housing downturn, we’re almost certainly going to see a later median age for first-home purchases in this country: The bubble burst combined with a spike in energy costs has “pushed us in a direction where the future of housing is different than in the past.” He thinks that down the road, the American housing market will come to look a little more like the European housing market: smaller homes that are more energy-­efficient, people staying in their places longer, fewer people owning. (“Is this good or bad?” I ask him. “Yes,” he replies.)

For now, however, the economist thinks that Philly is a good place to buy, and, yes, that now is a good moment—assuming, once again, that “you want to buy a home because you want to live in a home.” You’re not going to get rich, he says. And that game of making money by betting on the next hot Philly ’hood and planning to flip every three years is unlikely to yield happy results.

I think about our apartment. It feels like home to us—at least until we decide we want to feel rooted somewhere else badly enough to shell out a 20 percent down payment. Or until we have kids, which is, I suppose, its own commitment to permanence. Until that day comes, we’re content to just be each others’ roots, to perch mostly happily in our sweet little unpainted nest.

There’s also this: Huffman notes that as renters and owners both reconsider their roles and options going forward in this brave new real estate world, we might see rental choices designed to appeal to more and more people. He talks about the possibility of longer-term leases, or ones with built-in renewal options. Or the ability to change the space to your liking in some ways. “Like wall color,” he says.

In a city where the vacancy rate is so low and so many people are renting—86 percent of the under-34 crowd, the Inquirer reported last July—the idea of landlords suddenly becoming so flexible as to allow us to indulge our design cravings seems like a long shot. But I, for one, will still dare to dream, with my “Sunflower” and “Lemonade” paint chips at the ready.


Around the Web

Be respectful of our online community and contribute to an engaging conversation. We reserve the right to ban impersonators and remove comments that contain personal attacks, threats, or profanity, or are flat-out offensive. By posting here, you are permitting Philadelphia magazine and Metro Corp. to edit and republish your comment in all media.