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Here’s a thread about home ownership as someone who just sold their first primary residence 
Quick preface: numbers are approx and high-level (pretty much just initial equity, debt service, ending cash)
Quick preface: numbers are approx and high-level (pretty much just initial equity, debt service, ending cash)
I bought my home in May of 2010 for ~$196k, 5% down with an FHA loan at 5.25%. I started a business that failed putting refi out of the question so I’ve kept the same mortgage for a decade
Sold June of this year for $~327k - a tidy 67% price appreciation (5%+ CAGR). Decided to open an excel and do some quick math, WHAT!?! , a negative ROI!?
This is not a rent vs buying thread, or any sort of indictment of home ownership. It has tons of advantages. This analysis ignores the tax advantage, and for me,
forced savings during a turbulent period of entrepreneurship made it absolutely worthwhile.
forced savings during a turbulent period of entrepreneurship made it absolutely worthwhile.
But the vast majority of home owners have the bulk of their net worth in their homes. Mine was as close as possible to a best-case-scenario in terms of market timing and it still lost money.
We have policies that encourage levered consumption (mort interest tax deduction) and a low rate environment that completely skews “affordability” in ways that may be making people worse off and less mobile. We are buying bigger houses for smaller families 
If you aren’t a landlord or charging roommates rent you are making a bet solely on price appreciation/rates. I would have needed a CAGR closer to 6% to breakeven and that’s not counting and maintenance or “CAPEX”
The personal finance dogma of home ownership may be more cultural than empirical. In fairness, homeownership reduced my direct housing costs to less than $2k a year, but as an “investment” virtually every other asset class including cash beat it.
