Buying a house doesn't negatively impact your net worth, even if you owe money to the bank, unless your home value nose-dives for some reason (eg recession/depr

Buying a house doesn't negatively impact your net worth, even if you owe money to the bank, unless your home value nose-dives for some reason (eg recession/depression). Here's an example: Let's say today you have $100,000 cash in your bank account and no other assets to your name. Your net worth is $100,000. -- Now let's say that you buy a house tomorrow for $500,000. You put 20% down ($100,000) and secure a loan from the bank for the final $400,000. Here's your new net worth: Asset: House $500,000 Debt: Loan ($400,000) -- Total: $100,000