Maybe Treating Housing as an Investment was a Colossal, Society-Shattering Mistake
https://goodreason.substack.com/p/maybe-treating-housing-as-an-investment
Discussion
>assume the Fed gets its act together for 2% inflation
lol we truly have entered fantasy land, anyway
Massive hole in this logic, I see it all the time. They assume owning a home if the costs end up being more expensive, you are worse off. But its wrong.
>housing prices rise only 2%. Alice is much, much worse off for buying. In total, buying costs ~$1.75M, where renting would have cost her ~$1.3M
When you stop renting, you incur 100% loses and walk away with nothing but selling a home you get some of that money back.
So instead of losing 1.3 million renting, you would recover that money. Yes you are 450k less than starting but I am positive your children would prefer a 1.3m asset rather than 0.
often the down payment t opportunity cost is not considered. could that money be used better elsewhere. if not and the house is needed for shelter then go for it.