Is It Better to Buy a Home or to Rent?

March 1, 2009— -- Logan and Melissa Summers have two children, a dual income and good credit. They used to have a 30-year fixed mortgage, but two years ago, they sold their house in suburban Detroit and became renters.

"It definitely gives us the flexibility to look at homes and live in them if we are actually considering buying a house," said Logan.

But buying a home is far from their minds right now. With Detroit-area home prices at a 12-year low, plunging more than 21 percent in the past year, they say renting simply makes sense.

"People aren't earning equity on their homes right now," said Logan, who works as an advertising art director. "So in a sense, what we're doing right now isn't any different than what a homeowner is doing."

A few weeks ago, Logan and Melissa moved into their second rental home in as many years. The two-story, three-bedroom, 1,400-square foot bungalow was built in the 1920s and has a brick fireplace, new kitchen appliances and wood floors all throughout the house.

"It felt comfortable," said Melissa, who works from home as a blogger for SuburbanBliss.net. "When you are looking at rentals, you can't really change a lot, so you have to feel pretty comfortable with it."

Logan and Melissa currently pay $1,300 a month in rent, which is about $600 less than what they estimate a comparable home's monthly mortgage would cost them in their neighborhood. And as renters, they're also saving on the cost of insurance, repairs and property taxes.

"I think we are paying about 30 percent less than [when we owned]," said Melissa. "And that has given us a lot of peace of mind being able to save more money."

With the extra cash, they can eat out more and make more trips to the grocery store. Logan and Melissa are even planning a vacation with their kids, ages 10 and 7.

"It gives us the opportunity to set goals," said Logan.

Still, they haven't ruled out buying again.

"The housing market isn't going to rebound in a month," said Logan. "So I feel like we have the time right now to make that choice [to buy] as it comes to us."