As Bay Area housing prices continue to rise, many residents—the ones who aren’t planning their escape to Arizona, Oregon, Washington or Texas—are opting not to jump into fray.

Instead of squirreling away their dollars in hopes of being able to amass a six-figure down payment, they’re embracing the freedom and better cash flow that comes with renting instead of buying.

For many people, this approach makes sense emotionally and financially. The median price of a Bay Area home is $830,000 – more than three and a half times the median sale price of $232,700 for homes in the U.S. Anyone who’s visited an open house on the Peninsula, in San Francisco, the East Bay or San Jose knows that homes sell quickly and often above the asking price.

A recent Apartment List study of so-called high-income renters—people who earn no less than $100,000 a year, which is, however, solidly middle class in the Bay Area – found that this group has grown dramatically, particularly in cities such as Denver and Austin. In San Francisco, their numbers surged 65 percent. It isn’t clear whether that increase was because they were priced out of the housing market or preferred the flexibility of renting.

If you decide not to buy, for whatever reason, you’ll have more ready cash on hand than your homeowning friends. Consider a couple who buys a 3-bedroom, 2-bathroom home in San Carlos for $2 million. They put down 20 percent ($400,000) and pay about $7,600 a month on their 30-year mortgage at 4 percent interest. They also shell out about $2,000 a month for property taxes and need to set aside roughly $20,000 a year for home maintenance. Total monthly housing spend: $11,000.

Someone who rents a comparable property, however, would pay about half, or $5,000 to $6,000 a month. But they’ll have to invest that “surplus” wisely to compensate for a portfolio that lacks home ownership, which provides tax advantages and significant appreciation.

Renting makes sense if your long-term strategy is to live in the Bay Area during your working years, or at least a portion of them, and then relocate to a less expensive region when you retire. Generally, buying a home makes financial sense only if you plan to stay in an area for more than 10 years. However, keep in mind that given the housing prices here and their relentless climb, by the time you save the hundreds of thousands of dollars you’ll need for a significant down payment, your time horizon or your needs and wishes may have changed.

This handy rent or buy calculator from The New York Times lets you play with variables such as home price and mortgage rate, plus other expenses, to help you gauge what’s best for your needs, your peace of mind and your wallet.

The rent vs. buy question can be more nuanced, too. If you know where you’d like to retire or eventually settle—perhaps your hometown or a place where your extended family has clustered—you could purchase a home or condo there and rent it out while you live in the Bay Area.

If you’re not ready to make that commitment, be disciplined about earmarking a significant amount of money each month for a home purchase or rental down the line. Anticipating the expense and saving for it before you need it will smooth the path to home ownership, whether it’s years or decades away.

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