Biased Results? The New York Times Rent Or Buy Calculator—The New York Times offers a financial calculator aimed at helping users decide whether to rent or buy a home. However, this video explores potential biases embedded in the tool and demonstrates how to correct them in less than 3 minutes to obtain unbiased results. The video begins by explaining the concept of "assumption bias" and then provides instructions on how to remove each bias.
The calculator requires inputs like purchase price and rental rate. Still, if these inputs are based on biased assumptions—for example, comparing an apartment's rental rate to a single-family home's monthly payment—it can skew the results. The video highlights this by using a real property from Zillow to conduct a more accurate analysis. The results change significantly after aligning the types of properties (single-family homes for both renting and buying) and adjusting for realistic market conditions.
Further, the video critiques some of the calculator's default economic assumptions, such as the mortgage interest rate and down payment percentage. It demonstrates how using more typical figures for first-time buyers, such as a lower down payment, can alter the outcome of the rent versus buy analysis. Additionally, it points out the need for accurate predictions of future market movements, criticizing the calculator's use of arbitrary growth rates for home prices and rents.
Lastly, the video examines the impact of other financial factors like taxation, closing costs, and maintenance fees. It corrects for biases in these areas as well, demonstrating that when realistic, local data and more accurate assumptions are used, the financial benefits of buying generally outweigh renting. The creator suggests that the calculator's default settings might subtly encourage renting, possibly reflecting a broader agenda. By understanding and adjusting these biases, users can make more informed decisions tailored to their circumstances. #newyorktimes #buyorrent

🔗 Link to The New York Times Rent Or Buy Calculator: https://www.nytimes.com/interactive/2...

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00:00 New York Time Rent Vs Buy Calculator
00:28 Built-In Bias Must Be Removed
00:51 Likely Outcome For Most
01:01 How I Removed Each Bias
01:13 Bias #1 - Purchase Price & Rental Rates
01:54 Why Bias #1 Exists
02:30 The Unbiased Basics
02:44 Facts, Not Hype
03:10 Downpayment Bias
03:33 Unbiased Downpayment
03:59 Market Forecast Bias
04:28 Unbiased Market Forecast
04:49 Taxation Impact On Your Decision
05:37 Closing Costs Bias
05:45 Unbiased Closing Costs
06:14 Maintenance And Fees Bias
06:48 Unbiased Maintenance And Fees
07:28 Other Considerations In Buy vs Rent Analysis