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Survivor bias. I can name a few friends who bought in 2005-06 and it was a terrible decision. They lost their nest egg and forever became renters. On average

Survivor bias. I can name a few friends who bought in 2005-06 and it was a terrible decision. They lost their nest egg and forever became renters. On average, I think you're correct. You will likely benefit in the long term in the USA buying a home due to the financial incentives and constant creep of inflation. That said, there is a comparative advantage to renting and investing your down payment in something other than real estate. You also maintain flexibility. Don't forget, the transaction costs on real estate are significant and the investment can often become quite illiquid. You have to have some stability in order to make a home purchase a good idea. Moving every 5 years or less will usually eat away at your principal over time and leave you with less wealth than if you'd just have rented.

MattPalmer1086 4y ago
There are definitely better and worse time to buy, but in general it's good not to delay purchase for ages. I bought in London when prices were rising dramatically. It did feel like it was now or never at the time. We had held off buying for years, thinking that the crazy price rises were unsustainable. We were wrong, at least on any time frame that mattered for us. By the time we bought (I had some big pay increases) we ended up in a perfectly nice but small house that we could easily have bought for half the price 5 years earlier, and would have been affordable for us before I was better paid.
zw123456 4y ago
Fair point on survivor bias, it worked out for me, I am sharing my experience. I think I could amend my statement to something like owning a home is still the best investment for the little guy, if owning a home is important to you. It is for me, and I assumed anyone asking that question probably feels the same. If your situation is different, if for example, you want to move around a lot, or, if you do not want to be saddled with the work involved with owning and maintaining a home then it's not for you of course. But my advice stands, I you want to own a home, you should buy, even if it feels like a bad time or is going to be difficult.

MattPalmer1086 4y ago

There are definitely better and worse time to buy, but in general it's good not to delay purchase for ages. I bought in London when prices were rising dramatically. It did feel like it was now or never at the time. We had held off buying for years, thinking that the crazy price rises were unsustainable. We were wrong, at least on any time frame that mattered for us. By the time we bought (I had some big pay increases) we ended up in a perfectly nice but small house that we could easily have bought for half the price 5 years earlier, and would have been affordable for us before I was better paid.

zw123456 4y ago

Fair point on survivor bias, it worked out for me, I am sharing my experience. I think I could amend my statement to something like owning a home is still the best investment for the little guy, if owning a home is important to you. It is for me, and I assumed anyone asking that question probably feels the same. If your situation is different, if for example, you want to move around a lot, or, if you do not want to be saddled with the work involved with owning and maintaining a home then it's not for you of course. But my advice stands, I you want to own a home, you should buy, even if it feels like a bad time or is going to be difficult.