Originally Posted by echappist

the other one being (at the risk of sounding like a killjoy), unless one knows the stay at the house is greater than 4-5 years (@TKP mentioned moving for schools), it's most often better to rent and invest (CD for the risk averse, index fund for the more adventurous). Taxes (1-2% of purchase value per year), closing costs (2-3% of purchase value), and agent's fees (6% of purchase value) costs that one has to eat. Also plan to spend ~1% of purchase value per year on maintenance. Don't use the NYT buy v rent calculator (as it assumes a 3% appreciation and the fact that itemized deduction would be more favorable), use this one: https://michaelbluejay.com/house/rentvsbuy.html

When my then partner (and now wife) and I moved to Wisconsin, we were seriously considering about buying, but as we will most likely leave in another ~3 years, it made no sense. The aforementioned costs on a $300k house (with tax rate of ~2%) would have been ~$95k for a 15-yr mortgage and ~$102k for a 30-yr mortgage. Breaking even would have required an annualized return of ~2.5% (and this doesn't take into account of the maintenance costs), and we weren't confident that we'd necessarily see that sort of return. Remember that buying for short term with a loan is basically investing using margin accounts: the gains could be amplified, but so could the loses. Caveat emptor and all that