The short answer is that not all homes are equal but in general terms it is a good long term investment. I don't think it will be as good an investment going forward, because there is a lot of building pressure in the USA to ease up on the cost and difficulty in building homes - and that will increase the market size. Plus there are going to be a lot of baby boomers dying as well.
I read an article a couple of days ago about how the housing insurance market is totally f**ked because of all of the large-scale events and it isn't expected to get better, and as a result homeowners are going uninsured at all time record rates.
You can always find an insurance company to cover you. Most people don't realize that there are brokers out there that will find these insurers.
You can find them but they are expensive AF -- with so many companies pulling out of high risk areas at some point the government will have to step in like they did with flood.
Let's boil it down to simple math. If you buy a house that you live in for $100,000 with $25,000 down payment, a 2% yoy price increase represents an 8% ROI on your down payment (which, keep in mind, is all the money you actually put in). Unless you bought at the peak or otherwise pick a catastrophically bad place to buy, you can fairly safely count on real estate price to keep pace with inflation, so even without high alpha, you're pretty much guaranteed 8% ROI. Also, you get ~25% tax rebate on interest payment, whereas on rent you'd get none. Essentially risk-free leverage (and to lesser extent, tax policy) is the true secret to wealth building through owner-occupied real estate. On the other hand, if you are purchasing real estate with cash, then it truly needs to be evaluated against all other investment opportunities.
Why would you put 25% down on a primary? Put 5% down and use the 20% to pay off debt or use as emergency fund (in a high yield savings account), or buy a better property. Also equity on a primary is not a ROI unless the property was purchased in such a manner. IMO, houses are not an investment unless someone is flipping primary houses.
I wish I knew more about investing. I have a good 401k through work and I volunteer an extra 1%. We have equity but due to some life circumstances maybe a bit less than we should have considering the good real estate moves we've made. I've even started some CDs with extra savings just for that sweet, sweet passive income but I feel like it's hard to get my active bank account up high enough where I would feel comfortable doing investments again and feel like I would have time for it to grow and be able to contribute to it regularly and know what the hell I'm doing.
It helps you learn to do your finances and home repair quickly. It's debatable it'll make you wealthy because selling a home means you gotta find a good replacement. I guess you could use the equity gain to buy another home with leverage, but one step at a time, and learning about passive fund ETF investing in your 20's is probably the easier and saver "low risk" path towards becoming a millionaire by your 40s. It just means more cheap eats and finding ways to enjoy life without throwing money at yourself or other people. Save money, allocate a big chunk to your investments every month and don't do stupid things that deviate from your plan during boom or busts. Let compound interest work for you rather than against you.
Ooooooh. They'll be BACK. Betting on it (literally). They should stay high though IMO. Not even sure why we dick around. Make it 99% for 3 months instead of playing pee pee games.
Even better, pay off your debt and save an emergency fund BEFORE you buy a house. Then save up a 20% down payment so you don't have to pay PMI.
Interest rates are high right now and price homes have been stagnate. If someone wants to get into a home, buy now before prices go up. PMI and interest rates will come down. Home prices will not. But ideally, pay off all the debt first is the most responsible thing to do.
*revolving credit debt like cars and credit cards Having absolute zero debt is dumb. Leverage your credit to borrow money that you earn more on than you pay. That's how people build wealth.
two different questions is it better to rent or buy for my primary residence? is purchasing real estate the best way to improve my net worth?
