In America, is it generally worth renting vs owning a home?

[u/UJL123]

I [Canadian] was talking to an American friend [California] and we were on the topic of owning vs renting and why I still continue to rent in Canada even though I could afford to buy. I informed him that there's an opportunity cost in owning and that the appreciation of the house generally doesn't out pace the index. He understood but said that in the US there are tax benefits in owning and that those benefits probably skews it in favour of owning.

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Just to get a quick understanding of owning in America, what tax benefits are available for buying a house? Also, In Canada selling your primary residence is completely tax free but from my friend's reaction it doesn't seem like it is in America.

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In reductive terms, is the situation in America similar to Canada in regards to buying vs renting in economic terms?

[u/tdpdcpa]

The old "rent vs. own" debate is always heated on this subreddit and whoever posts will generally post in favor of their current situation. The fact of the matter is that it's heavily situationally-dependent and can result in you coming out ahead in one scenario or the other.

The best tool I've seen to evaluate this has been the NYTimes Rent vs. Buy Calculator. Note that a lot of the inputs here will be situationally-dependent or even unknown or unknowable.

Just to get a quick understanding of owning in America, what tax benefits are available for buying a house?

In America, your mortgage interest and PMI on your first or second homes are deductible as itemized deductions.

Property taxes are deductible as itemized deductions. Together with state and local income taxes, these are subject to a $10K cap.

Gains on the sale of your home are excluded from income up to $250K ($500K if you're married and filing a joint tax return).

Conversely, rent is not deductible for personal income tax purposes.