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> Housing prices are constantly rising Housing prices typically appreciate up with inflation over the long run, although local markets don't always follow the
by gwbas1c 1y ago
> Housing prices are constantly rising
Housing prices typically appreciate up with inflation over the long run, although local markets don't always follow the same pattern. (IE, Silicon Valley is a case where real estate appreciated faster than inflation.)
Remember, it's over the long run. There can be periods where a house will appreciate faster than inflation, and other periods where the real value of a house doesn't keep up. If you understand this dynamic, you can make a lot of money. (IE, flipping and then becoming a landlord when the market turns.)
- JKCalhoun 1y agoSince the not-yet-homeowner is no doubt paying rent, home appreciation can slip by some measure below the rate of inflation and still have been a wise investment. Of course there is home insurance and repairs to consider. But also there is the increase in rent to consider on the other side as well.
- bluGill 1y agoDepends on how long the not yet homeowener will live there. If you live in the same house for the next 40 years you are almost certainly better off owning it. However if you have to move after a year (which might not be in your control) you probably will lose money. 7 years is a good rule of thumb for minimum time you need to live in a house before it is better than renting, but exact circumstances can be very different.
- gwbas1c 1y ago> repairs My house is 7 years old and the various amount of things I need to fix is making me miss being a renter. That being said, generally the reason why home ownership is a "good deal" in the US is because you can accumulate equity, even when the value of the home keeps up with inflation. (Technically it means that inflation works in your favor if you have a fixed-rate mortgage.)