“Should I continue to rent? Or should I buy?” is the single most common question I am asked, except for maybe “What is my home worth?”  

I’m often asked why renting can seem cheaper than buying. This The New York Times Real Estate Section reader is wondering that too. While Trulia’s Chief Economist has a sensible response, he’s not telling her the whole story.

The reader is missing two points:

1. When you pay rent, you’re paying an expense. When you are paying your mortgage, you are investing in an asset. Not only are you investing in an asset, but it’s an asset that historically raises in value over time.
2. The tax advantages of the mortgage interest deduction over time is such so that on a post-tax basis, the monthly difference in cost is much smaller.

What if you are sitting on the fence?  Here’s some food for thought…

The real estate experts are telling us that home prices will continue to rise in the bedroom communities of New York City, as will interest rates. And we’ve already seen this happen. What does that mean for you?  Less house for more money.

As with everything in life – talk to the experts, like your account or financial advisor, for advice that suits your specific needs.