By putting the money saved by renting into a small business instead. the 22-year old Mark Zuckerberg just turned down a $1.6 BILLION offer from Yahoo to sell Facebook.com. He rents. If he could not afford the hosting fees for the web site at first because he was spending all his money on a mortgage instead of rent oh yeah in 30 years he might have close to a million dollars in equity too if he made all the right moves. But he went from being a college student in debt to owning a $1.6 BILLION asset in just two years by putting his money and effort into a small business (that is not so small anymore).
For every story like that there are hundreds of stories of people that pissed away the difference on consumable goods and ill fated investments. His odds of hitting it that big when he started were no better than the odds of hitting a progressive jackpot on a slot machine. Maybe we should all rent so we can invest the savings in horse track futures.
So you reference a one in a million story. I am talking everyday Joe's here. I view my home as my annuity. Being 38 years old, I can't depend on SS. I'll have my 401K and a home that is free and clear when I am 60 years old. I sell it, move into one that is half the size for half the price (or further away for 1/3 the price) and put $500K in my pocket. I think $500K plus another $1.5MM from my 401K and my wife's 401K will suffice for the rest of our lives. Hell, just 4% annual interest off of $2MM would generate $80K a year. With no mortgage to pay, I think we could "get by" on $6,500/month. Renting is foolish....but all of my landlord clients love you for it.