rent versus buy

Houses are cheap. Interest rates are low. And the economy is improving. Even Warren Buffett says that housing might be the best investment today. So should you run out and buy a home? Not necessarily.

At the top of the housing bubble, the gap between the cost of rent and the cost of buying a home widened to 66% in some parts of the country. In other words, it was 66% more expensive to buy a house and pay the mortgage than it was to rent. Historically, a gap of about 12% is the norm. Now that...