The Pros and Cons of Buying or Renting a Home

In a cost-conscious TED-Ed lesson written by Ella Feldman and animated by Josh Pilch of Augenblick Studios, narrator Addison Anderson explores the pros and cons of buying or renting a home through the example of twins who choose different paths.

Morgan and her twin sister Lisa moved into identical houses right next to each other. The only difference? Morgan bought her house, while Lisa is renting hers.

While conventional wisdom says buying is always better than renting, both options can have benefits over time.

After 30 years, Morgan is finally done paying off her mortgage. To get there, she spent about $1 million, including the house price, interest, taxes, and insurance. But she’s also had to pay for repairs and upkeep, bringing her total to $1.4 million. Meanwhile, Lisa’s rent is now $3,300 a month, and she’s spent around $900,000 on rent. … When Morgan chose to spend $40,000 on a down payment, she missed out on putting that $40,000 into a stable, diversified retirement account. That’s what Lisa did, and it’s grown into $500,000.