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> Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return I think you have the cause and effect reversed. They b
by xscott 3y ago
> Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return
I think you have the cause and effect reversed. They believe a home yields a return because it does. They aren't delusional or stupid - they're making money. There's nothing to "deprogram".
Maybe dive one layer deeper and ask why investing in houses has been better than investing in stocks or bonds/CDs.
- etrautmann 3y agoIs it? I’m fairly certain that my returns on index funds beat risk adjusted real estate gambles in most markets over most time ranges.
- etrautmann 3y agoAnd certainly when factoring in liquidity and peace of mind, which is different for different people but has real value to many.
- AnimalMuppet 3y agoHouses are where the average person gets to be a leveraged investor. If I invest in an index fund and it goes up 10%, I've made 10%. If I invest in a house and it goes up 10%, but I invested with 5% down, I have tripled my money. But the reverse is also true. People are hugely sensitive to house prices falling, because they are leveraged. If I owned my home outright (no mortgage) and the value fell 10%, I wouldn't be happy. But if I had a mortgage with 5% down, all my equity got wiped out, and I'm now 5% underwater.