Most young frum couples think about buying a house at some point, and many try to grab one as soon as possible. Contrarians, including some very savvy economists and financial advisors, argue that home purchasing is not as beneficial as is broadly assumed. Renting a home and investing the relative savings can be as good, or even better a path without the headache and burdens of home ownership. So don’t blindly follow the herd!
Believe it or not, this isn’t a perspective to be dismissed lightly. See, for example, this fascinating in-depth study by Brad Case, PhD, CFA, CAIA, a brilliant and articulate housing economist.
Renting Is Usually a Better Investment Than Buying
However, although I greatly respect Mr. Case’s knowledge and acumen, I still believe that most frum couples who are planting family roots should be buying, not renting. While it is a mistake to rush to buy a house, once a family has a good idea of their future income and housing needs, they will likely be much better off owning a home than renting an equivalent one. While pure numbers make buying versus renting a bit of a toss-up, multiple vital factors go beyond the basic math. Here are my top 7 massive benefits of homebuying.
Forced Motivational Savings
Many young couples with minimal family overhead feel flush. They spend on narishkeit, oblivious to the future tsunami of expenses they’ll face down the line as their families grow. Indeed, most Americans have virtually no savings beyond their home equity. Buying a house is a built-in and motivational savings program. This savings reality goes beyond dry mathematical analysis. As the years pass, an increasing portion of each mortgage payment is allocated to equity, and the owner’s net worth will grow steadily.
Rents Go Up, Up, UP!
Housing prices tend to go up due to inflation and increased demand. Renters often find that, with time, rental payments rise to equal and then surpass mortgage payments. Buying a house locks in most of the cost of housing for life (though not property taxes and maintenance, unfortunately), which, in the long run, enhances a family’s financial security. The early years of discounted housing expenses for renters generally fade into history as rental costs rise unchecked.
Homes as Solid Investments
In addition to locking in your ongoing housing costs, buying real estate has excellent long-term investment potential. Housing values in the United States have generally always risen. And in frum areas, due to our population growth, KH, and propensity for clustering together, there’s significant housing pricing pressure. Although real estate markets may fluctuate significantly over long periods, they’ve mostly trended upward. On top of steady price appreciation, you’ve got the benefits of avoiding rent and excellent mortgage leverage flexibility. Compound that over the decades, and you’ve got a real asset!
Hedge Your Housing
Even if it turns out that housing values and rents in your area don’t skyrocket, there’s still tremendous value in locking in your housing costs as a hedge against the POSSIBILITY of being priced out of a roof overhead and a family’s preferred neighborhood. Just as we pay tons of money for insurance of all kinds, hedging one of your most significant and impactful basic lifetime needs is worth a lot of money. This reality is often overlooked by those who calculate the costs of buying versus renting.
Planting Family Roots
There are many cases of families in major frum communities who, after years and decades of planting communal roots, were forced to move out of their neighborhoods due to spiraling rents. Beyond the actual dollars involved, the emotional and social stress of being beholden to a landlord’s whims and being forced to move your family away from neighbors, friends, shul, and so on at any time is a very precarious way to live. This non-financial factor alone makes a strong case for investing the money and effort to buy a house in your preferred neighborhood.
Mortgage Tax Breaks
For some households, buying a house can result in a tax savings discount through the home mortgage deduction. This significant tax break allows homeowners to deduct interest paid on up to $750,000 of mortgage debt used to buy, build, or improve their homes. To benefit, you must itemize deductions on your tax return—meaning your total deductions (including mortgage interest, state and local taxes, and charitable gifts) must exceed the standard deduction ($30,000 in 2025) for this tax break to matter. However, for many families, the tax-deductible value of thousands, even tens of thousands of dollars annually, can tip the scales further in favor of owning a home.
A House Is a Backup Asset
While not ideal, tapping into home equity —the accumulated effect of forced amortization, saving, and price increases —is often a necessity. Life has its twists and turns, and as families grow, careers change, businesses are opened and closed, and through simchas and tragedies, it’s essential to have a backup source of significant cash. Real estate is considered the most secure form of collateral, and homeowners can usually tap into their built-up equity more quickly, cheaply, and without tax ramifications compared to other loans and growth investments. Having an asset to back up other financial needs is a benefit that permanent renters will probably miss greatly at some point or another.
Retirement Plan B
We’ve written before that home equity is also a significant part of Retirement Plan B. Home equity can be tapped in tax-advantaged ways that far surpass what a typical IRA or 401(k) can offer! While a house isn’t a diversified asset, home appreciation has tended to be pretty steady and consistent, so counting on it for retirement may be as good or better a bet than relying on the ever-volatile financial markets. Ideally, seniors would have both fully funded retirement accounts and tons of home equity. But counting on home equity has been a solid Plan B for many.
Sometimes, The Herd Is Right!
Bottom line, sometimes the herd is right! Yes, some serious data is questioning whether homeownership is the better financial move for long-term housing needs. But once all factors are considered, buying a house is indeed a no-brainer for most frum couples.
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