Nobel laureate economist Robert Shiller of Yale University has repeatedly pointed out that if you're going to buy a house, it should be for a place to live, not as an investment.
Wall Street Journal columnist Jonathan Clements makes the same point. "The words 'home' and 'investment' don’t belong in the same sentence," he writes.
That doesn't mean he opposes home ownership. "The tax breaks are impressive," Clements says. "Home ownership forces us to save: with each mortgage payment, we whittle down the loan balance, so eventually we own a valuable asset free and clear. Most important, a home provides us with a place to live."
But don't expect much in terms of price appreciation. Freddie Mac calculates that home prices have advanced just 3.7 percent annually over the last 30 years, not much more than the 2.8 percent inflation rate.
Add in the costs of buying, owning and selling a home and you could be talking a miniscule return, Clements notes.
But renting is turning into an expensive proposition.
"Over the past 14 years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand and insufficient growth in the supply of rental housing,"
Zillow Chief Economist Stan Humphries tells CNBC.
"Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable."
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