One Way or the Other- You're Paying a Mortage

Some potential first time buyers or vacation home buyers have not taken the leap because they fear taking on a mortgage obligation.

A recent paper from the Joint Center for Housing Studies at Harvard University http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/w13-1_belsky_0.pdf posits that unless you are living rent free, perhaps in a parent's basement, or if you own your vacation home instead of renting one, you are paying a mortgage- either yours or your landlord's. 

“Households must consume
housing whether they own or rent. Not even accounting for more favorable tax
treatment of owning, homeowners pay debt service to pay down their own
principal while households that rent pay down the principal of a landlord plus
a rate of return. That’s yet another reason owning often does—as Americans
intuit—end up making more financial sense than renting.”

Also, if you purchase with a
30-year fixed rate mortgage, your ‘housing expense’ is locked in over the
thirty years for the most part. If you rent, the one guarantee you will have is
that your rent will increase over that same thirty year time period.

Whether you are looking for a
primary residence for the first time or are considering a vacation home on the
shore, owning might make more sense than renting since prices and interest
rates are still at bargain prices.