To rent or own in the U.S.?

If this question is rattling around your head, consider this, lest you are over-burdened with money and can afford to part with yours. Home buyers need solid data, above and beyond advertising and marketing, to make an informed purchase. Fortunately, Washington, D.C.'s Center for Economic and Policy Research has updated its snappy Housing Cost Calculator (www.cepr.net/calculators/calc_housing.html) for people just like you, based on Uncle Sam's data.

Enter the home price, down payment, mortgage rate, tax bracket and future sell-date, and you will get the "net cost of owning." The calculator compares that to the cost of renting for the same period of time. Check it out.

Besides a home sale price in the future less than the initial purchase price, there are fees and commissions to consider in owning a house. Call these hidden costs, if you will. Whatever your term, you will be paying these costs to play the home-buying game.

Of course, your family and friends who are still employed in the mortgage and real estate industries that are shedding jobs left and right might not like you for using the Housing Cost Calculator numbers. You might do just that, though, and decide you're better off renting than buying. Why? The simple reason is the calculator relies on one important assumption: that the historic rise in U.S. home prices the past 10 years will return to the "more normal historic trend."

Funny how mainstream economists and pundits failed to see that home prices over the last decade diverged from trend prices, which bubbled up and up, thanks in no small part to the "easy money" policies of the former head of the Federal Reserve, Alan Greenspan, whose new book, "The Age of Turbulence: Adventures in a New World," is just out and headline news.

Helping to propel the U.S. home bubble, the Chairman cut, again and again, the cost to borrow money. His monetary policy followed the bust of the dot-com/hi-tech stock market bubble that, in turn, spawned the 2001 recession underway prior to the September 11 attacks on the East Coast.

Meanwhile, the once-growing U.S. housing bubble is shrinking fast. This deflationary trend of falling home prices and sales means a lot of pain and suffering for working people who bought houses at the bubbly peak, scores of whom agreed to terms that put them financially at-risk. Many of them would be in better shape if they had access to the CEPR's Housing Cost Calculator before buying a home.

Seth Sandronsky lives and writes in Sacramento.