The question is housing as a investment mechanism, rather then housing as .. housing - or - housing as a revenue generation mechanism. I would point out that t

The question is housing as a investment mechanism, rather then housing as .. housing - or - housing as a revenue generation mechanism. I would point out that that. 1) One, if it's as housing, then you are actually living there. The alternative is not dumping money into the S&P 500. It's paying rent. Where I live, rent prices match pretty closely to mortgage prices, So what you are really saving by renting is the down payment. For owner-occupied, that number can be remarkably small (and should be for your first house). The current interest rates mean that outside of expensive areas (see SF, London, Tokyo) - if the rent and the mortgage are near equal, you are going to hold it for some period of time and the down payment cost is reasonable, you should try and build equity. 1a) If there is a way to swing it, it almost always makes more sense to hold on to a property once you have purchased it. Selling a house in the USA is crazy expensive. 6% commission is not that short of 10% down on property. The real investment (versus housing scenario) comes if you can find a way to rent out old properties for amounts that cover your mortgage on that property. Buying a house opens up the opportunity to take a house you might have previously lived in, and treat that as a investment. 2) In the stock crazy world we live in, people forget that stocks used to be about buying dividends, as much as speculation. This article focuses on investment as speculation, but I think the revenue generation side is much more important here. As mentioned above, at least in my state rent and mortgage run pretty close together. So it's not that hard to get to the point that the rent covers the price of the mortgage + taxes. The difference is the down payment that you put up versus a renting (renters don't have to put the money away for that). The upside is that I am basically purchasing the rent by putting the money down for the house.. Paid back when renters rent the house. Any appreciation is just gravy, and while deprecation over time is a concern, a severe enough running decline is likely smaller then the same decline that has hit stocks. Also, as a secured asset, there is a floor to the value of the investment, unlike stocks. Given how overheated the market is right now - this seems much saner to me. So would I theoretically make more money taking every cent I own, and plow it into Tesla? Maybe, but the risk that this gets completely wiped out is much higher. Combine this with something like a 401k or a IRA, and I think it's a pretty reasonable investment strategy.