Minimodule: Buying a House vs. Renting

Background

In deciding where to live, people face the financial decision of whether to buy or rent. We analyze this question for a family considering houses in the $80,000 range. Based on the author's location in Texas, such a price would buy a three-bedroom house with 1-1⁄2 baths, den, kitchen, attached garage, brick, air conditioning and heating, slab foundation, and copper plumbing. Rental advertisements indicate that this house would rent for about $1000 per month.