Is renting the new American Dream?

I can hear Grandpa in my head.

“What are you thinking?” I envision him saying.

A lifelong Republican and factory worker in a small Illinois town, my grandfather was definitely an old-school conservative who valued every dollar.

I remember as a young boy when he gave me a piggy bank. Not one that looks like a pig, but one that resembled the Streator Home Building & Loan where he opened a savings account in my name.

George Bailey would have been proud.

When Grandpa visited our house, which was just a few blocks away, he would put change in the piggy bank and encourage me to do the same.

As we filled it and made deposits, I would track the amount in a ledger that came with the account. Grandpa’s philosophy about saving money is one that many in this country grew up with and heard from their parents and grandparents. It fit the narrative that we needed to save and use those savings for a down payment to purchase a house.

Owning a home was a huge part of the American Dream, and it was dutifully drummed into my head as long as I can remember. Only people who wanted to be poor threw money away on rent, I was told, over and over.

That was the contrast between Jimmy Stewart’s dream for Bedford Falls in the movie It’s A Wonderful Life. There was the alternate reality of Pottersville where even more wealth flowed to Mr. Potter and his rental units. I’m sure Grandpa wouldn’t be too happy that his philosophy didn’t filter down to me.

I’ve yet to own a home and have no plans to do so even though median prices have fallen more than 60 percent. It raises the question of whether that thinking is wrong or just a reflection of the different society we live in today compared with that of our grandparents and parents.

Look, it’s not wrong. Not at all. And don’t let anyone tell you otherwise.

That thinking isn’t uncommon in Las Vegas, whose homeownership rate of 59 percent lags behind the nation’s rate of 67 percent. Given the housing collapse, people are skeptical about buying, which is understandable. Just 64 percent see a home as a safe investment, according to a recent report from Bloomberg. Although there are legitimate questions about whether having too many renters is bad for a business climate and, by extension, a community, the ability to rent or buy in Las Vegas at least means options for employees of businesses that are thinking about relocating here. New residents can now rent before they decide to buy without the stigma renting once carried.

For someone who has moved around quite frequently, living in Dallas, Illinois, Washington, D.C., Amman, Jordan and Los Angeles, locking myself long-term to a piece of property simply didn’t make sense. Moving to Las Vegas from Los Angeles in early 2005, lifestyle came into the equation as well. I wanted a piece of the Strip, and the only way to achieve that was to rent. For less than $900 a month, I was able to rent a 750-square-foot unit at the Meridian at Flamingo Road and Koval Lane. I had a third-floor unit with a balcony overlooking the Strip north of Flamingo Road. The complex, with its swimming pool, indoor basketball court and other amenities, gave it the resort-type touch I wanted.

That was until Meridian was bought out in the condo conversion craze shortly after I moved in, and the developer offered units for sale to tenants.

When someone wants to know if you’ll pay $385,000 for a one-bedroom unit that’s built as an apartment when new homes are selling for a median price of less than $300,000, what are they smoking? On a loan of that amount, the monthly payment would have surpassed $2,500 before association fees and taxes.

I don’t think Grandpa had paying $1,600 more for a monthly mortgage payment than I could pay in rent in mind when he was giving me homeownership advice.

And, of course, we’re talking conventional loans. Grandpa’s blood pressure would’ve risen at the thought of an adjustable-rate mortgage that is going to increase. That would’ve emptied the piggy bank in a hurry, and I decided in 2007 to rent a town house rather than purchase at Meridian. That unit I could have bought is now worth less than $100,000.

That’s a decision many Las Vegans faced when they moved here during the past decade. Some, like me—the real estate reporter for Greenspun Media Group for more than half a decade—decided to rent given the high prices, despite the easy credit. Others opted to make the plunge and buy, fearful prices would go even higher. They didn’t want to lose out. They watched as people profited from homeownership, taking equity from the property.

I got that message of missing out when I spoke in 2006 with then-Greater Las Vegas Association of Realtors President Linda Rheinberger. I told her it didn’t make sense to pay such a high price for a home when I could rent so inexpensively. Besides, something had to give with home prices because there weren’t enough buyers making enough in income to keep paying prices owners were seeking. How much give? I didn’t know.

That give has taken place, and the median price of homes sold in Las Vegas has fallen more than 60 percent since 2006 to $108,000. Does that mean it’s time to heed Grandpa Wargo’s advice and buy?

Not for me, and people shouldn’t feel they must buy, unless it makes sense in their specific cases.

This is a different world today. People don’t settle in one place for long, especially in a transient community such as Las Vegas.

“It all depends on what their intention is,” says Amara Collins, a sales executive with Shapiro & Sher Group. “For families unsure of what’s coming in the future, it still may not be a good time. You may want to still look at leasing.”

First, not everyone wants the responsibility of owning and maintaining a home. Some simply prefer to lock and leave.

It’s understandable to be worried about home prices falling another 10 to 15 percent. A price increase might be a couple of years off, and even that’s likely to be minimal given the oversupply in the market and weak job creation on the horizon for an economy overly reliant on construction.

Many are still uneasy about their jobs and income prospects and whether they’ll even stay in Las Vegas. If you’re planning on reselling quickly or don’t know where you’ll be in three to five years, you should hold off on buying, Collins says.

“If you’re leasing you’re in a less committed position and you have more flexibility,” Collins said. “Buying a home is a big commitment. It’s a marriage you can’t annul.”

As a lifelong bachelor, that concept makes buying a home even less appealing to me. But like many who remain single, I hear from people asking when I’m going to get married. The same pressure exists for people who rent. Real estate search engine Trulia has Las Vegas on its most recent list as the No. 1 city in the nation where owning trumps renting.

It was that 20th-Century, American-Dream thinking that Grandpa subscribed to that prompted many Las Vegans to buy even during the boom. After the median price shot up 68 percent from $164,000 in 2003 to $275,000 in 2005, many plunged into buying. The price peaked in 2006 before it fell. A lot of those people are underwater—they owe more on their mortgages than the homes are worth. I’m sure a lot of those folks now wish they’d rented.

Even renters who want to take advantage of low prices face obstacles. Tighter lending standards require higher credit scores and as much as 20 percent down payments. Some don’t want to part with any precious cash in this economy, and some would like to improve their credit scores to lower down payments and interest rates. And for all the bargain prices of homes, investors using cash are swooping in and buying them ahead of those who want to live in them. Trying to work with a homeowner through a short sale—in which the bank allows the owner to sell for less than is owed on the mortgage—can take months with no guarantee of success.

Just because home prices are down doesn’t mean buying is a bargain over renting.

And one thing you shouldn’t buy right now is a Strip-facing condo unit. You can lease a unit at CityCenter for less than half what you’d pay for a mortgage, homeowners association fees and taxes in most cases. You can rent a studio at Veer Towers in CityCenter for $1,200 a month, but buying the same place would cost $353,000, Collins says. After putting 20 percent down, the monthly mortgage payment on a 30-year loan at 6 percent would be $1,700. Add in $588 in association fees and $200 a month in taxes and the payment is closer to $2,500 a month, Collins says. That’s $1,300 you could invest in the stock market or another venture.

Some in Las Vegas, though, should look at buying. They’re people who know they’re going to be in here 10 years or longer, have stability in their work and income and know they’ll save money by purchasing, especially for plenty of higher-end homes.

Collins cites 3,400 square-foot homes popular in Summerlin that rent for about $4,500 a month. Those homes sell for about $600,000. The mortgage will be about $2,900 a month on a 30-year loan, association fees run about $250 and taxes $400 a month. All in, that’s about $3,500 a month combined, which is $1,000 less than renting, she says.

So if you fit those criteria, then you should buy.

Just because renting is a viable option, it doesn’t mean the dream of homeownership has died forever. I may still purchase a home one day, but sometimes dreams don’t follow one path and instead have alternatives, especially if I choose bachelor, high-rise living. For now.

Grandpa was right as he always was, but he was right for the era he lived in when people stayed in one place, jobs were secure over a lifetime and you saved money by buying rather than pouring your money into rent.

Maybe it’s a good thing I never told Grandpa Wargo I used to sneak into my piggy bank, too.