Renters wealthier than homeowners?

This report from CNN details the findings in a paper by David Rosnick and Dean Baker at the Center for Economic and Policy Research in which it was discovered that those who have been renting over the last five years are now wealthier than those who "own" their homes.

Whaaaaaat? (think Jon Stewart in a Home Alone pose)

That kind of flies in the face of everything you might hear from the National Association of Realtors about housing being such a great investment, but there it is:

The CEPR also found that people who were renting homes in 2004 will have more wealth in 2009 than those who were owners. That's true for all five wealth groups the study analyzed, from the poorest to the wealthiest.
"The collapse of the housing bubble, which led to the current recession, has already destroyed almost $6 trillion dollars in housing wealth for homeowners," said report co-author Dean Baker. "This reality is compounded by the recent collapse of the stock market. Many baby boomers will only have Social Security and Medicare to rely on in their retirement."

It's important to note that Dean Baker is one of only about two economists in the world who, not only recognized the housing bubble in real time, but took the additional step of cashing out a few years ago, transforming himself into a renter, about whom he speaks so highly now.

As an added bonus, Peter Schiff (also a renter in recent years) makes a guest appearance:

Peter Schiff, president of Euro Pacific Capital, an investment firm specializing in overseas investments and a noted bear on housing market issues, thinks there's a good chance home prices will continue their steep decline.

"Real estate has to be priced like any other goods," he said. "Home prices have to reflect the economic reality. You buy for shelter, not to make money. You don't need to own a house. I'm a perfect example."

He has rented for years and reports that the owners of his current home, after subtracting for property taxes and insurance, are receiving a cash-flow return on their investment of less than 1%.

"Real estate is overpriced if owners get just a 1% return," he said.

It's funny to think that buying a house to make money to fund your retirement was a commonly held view amongst economists a few years ago.

That is, back when they were dismissing the zero-savings rate as being irrelevant in our new modern economy with "financial innovation" that seemingly knew no bounds.

There's no word on whether co-author David Rosnick also rents.