the prices of rent and the price of buying does not make sense to me, mostly the rent will not cover the mortgage . Is it better to rent a house or to buy?
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generally thinking is that buying is better b/c the payments that would go into the rent start building equity in your home. the govt also incentivizes you to buy by making your property tax payments and mortgage interest payments tax deductible.
having said that current housing status in the bay area is such that housing cost to purchase is relatively high and rental prices (compared to ownership cost) are relatively low (relative to the rest of the country). it makes lese sense to buy vs. other places.
bottom line you should base your decision on whether you think the market will keep going up or not. the other numbers tend to even out, the main gain or loss in buying comes from appreciation/depreciation.
Another important factor to consider is the stage of life at you are at. If you have decided to settle down, and want to stay in the same area from 7-20 years or more, then buying probably makes sense. If you want to stay flexible in terms of where you are geographically, and also want to explore periods of working professionally mixed with periods of time off to enjoy life, then the mortgage can be a reall mood-killer 🙂
Right at this moment I would recommend renting over buying. Kiplinger recently predicted a 40% likelihood of housing prices here falling over the next 2 years: http://www.kiplinger.com/personalfinance…
For now the stock market is probably a safer place to park your money.
Agreed to all of the above points. End of the day, you should consider the kind of residence/living standard you would like to enjoy. Then calculate the per-month total cost of home ownership for such a property. If you can afford it, then you should consider whether you are going to reside at that residence for the long term. If you consider historical real estate prices in California, over any 5 year period there has never been a net decrease in real estate pricing. If you can do that, then consider buying. Otherwise, I would rent. Caveat: I am a renter looking to buy.