My parents and my wife's parents are both entering retirement and both have fully paid off their homes. It's nice knowing that if push ever came to shove, they are both sitting on $400,000 that they would not otherwise have had they been renting all this time. Sure they have to live to somewhere, but if they sold they could buy a cheaper house or rent. They could take out a HELOC. Plus neither set has any payments to make except insurance and taxes, which is a few hundred a month, at most. To rent now they would be paying $1000+ easy.
It also makes sense as a nice way to diversify your investments.
Finally, we paid $185,000 for our home 5 years ago and it is now worth $450,000. Did I expect that return? No. Do I expect a good return over the next 5 years? Nope. But if we ever have to move, I have $265,000 to put down on my next house to bring my new mortgage payments more in line with my current one. You don't get that renting. If you miss a large run up in market value like we have seen, your rent goes up and up and you have nothing to show for it. If you want to buy in now, you are paying double what I would have to pay if I sold and rebought in now. If there is no run up in property value, owning still makes more sense if you itemize your deductions. The only good thing about renting is you can move any time you want, but you definitely pay for that privledge.
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