When Buying a Home Doesn't Pay

My life as a renter is well known to my colleagues and friends, and even to Kiplinger readers (see "Millennial Money," Dec. 2020).

And while my previous attempts at rent negotiations didn't succeed, I eventually ended up moving into a different (and bigger) unit in the same complex at a cheaper rate. However, as I watch my friends go through the home-buying process, it makes me question whether I'm throwing away my money and the wealth-building potential of owning a home.

Personal finance experts have long held that homeownership is a key step to building lasting wealth (see How to Build Wealth, May). A home is an asset that generally appreciates in value over time, and buyers also benefit from leverage: You can borrow up to 80% of the value of a home, or even more with a low down payment loan.