The problem with home ownership is that people don't know how to properly value risk the way financial institutions do. One of the more eye-opening assignments

The problem with home ownership is that people don't know how to properly value risk the way financial institutions do. One of the more eye-opening assignments I've had was working with portfolio theory for a bank. Portfolio is pretty much hoppycock used to explain for the customer why they bank lost money on your investment. Giving you nice charts for how much risk was taken and how they performed compared to some index. While portfolio theory in itself is BS it demonstrates well how risk is something that has a value, and protecting against that risk costs money (hedging) Texas Hold'em is the same, what is the risk (odds of winning) and how much can I win determines how much I can bet (invest) in a hand (home). With homes people have no proper sense of the risks they're taking. Cognitive dissonance together with a surprisingly short view of history and survivor bias makes investing a home seem like a no brainer. Its often futile to even have a discussions of potential risks with a homeowner because they don't want to hear it. Sure the risk might greater or it mighty be less in the same way that you can play russian roulette with one bullet or five, but there's always some risk and often greater than you would think in these times. Homeowners however vehemently will deny any risk and keep spouting about how homes have gone up in the last 5, 10, 20 or whatever years and some neighbour who made it rich. In any case they say if the price goes down I'll stay put until it goes up again since I have no plans of moving, like the bank won't take your home if it goes down enough that you can't cover your mortage. I'm not saying you absolutely shouldn't by a home but at least one should be aware of the risks :)