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Started By
Message
re: The math for buying a home no longer works, per WSJ
Posted on 12/20/23 at 9:28 am to Steadyhands
Posted on 12/20/23 at 9:28 am to Steadyhands
quote:
Clearly the math hasn't worked for a while, this didn't just happen.
Don't buy houses you can't afford and that are over priced, and this current income to cost ratio wouldn't exist.
Buying a house to live in and calling it an investment has never been a good idea. At any time in history if you broke even after taxes, insurance, interest and maintenance you were fortunate. If you did the maintenance yourself you may have saved some money but you had an opportunity cost that is impossible to calculate. If you did make more than it cost to own and you did not down size or buy again in an area where prices had not increased all you did was swap one "asset" for another of equal value. This does not include the fact that owning a pile of bricks can be an anchor that keeps you from growing your career and taking advantage of opportunities. Owning a home is an expense. If you are fortunate it may not cost you much more than renting to own it. The piece of mind from owning is very valuable to some but that is often replaced by regret over the costs of owning.
3
Posted on 12/20/23 at 9:33 am to AwgustaDawg
quote:
Buying a house to live in and calling it an investment has never been a good idea. At any time in history if you broke even after taxes, insurance, interest and maintenance you were fortunate. If you did the maintenance yourself you may have saved some money but you had an opportunity cost that is impossible to calculate. If you did make more than it cost to own and you did not down size or buy again in an area where prices had not increased all you did was swap one "asset" for another of equal value. This does not include the fact that owning a pile of bricks can be an anchor that keeps you from growing your career and taking advantage of opportunities. Owning a home is an expense. If you are fortunate it may not cost you much more than renting to own it. The piece of mind from owning is very valuable to some but that is often replaced by regret over the costs of owning
883 characters typed to say absolutely nothing.
Posted on 12/20/23 at 3:44 pm to AwgustaDawg
quote:
Buying a house to live in and calling it an investment has never been a good idea. At any time in history if you broke even after taxes, insurance, interest and maintenance you were fortunate. If you did the maintenance yourself you may have saved some money but you had an opportunity cost that is impossible to calculate. If you did make more than it cost to own and you did not down size or buy again in an area where prices had not increased all you did was swap one "asset" for another of equal value. This does not include the fact that owning a pile of bricks can be an anchor that keeps you from growing your career and taking advantage of opportunities. Owning a home is an expense. If you are fortunate it may not cost you much more than renting to own it. The piece of mind from owning is very valuable to some but that is often replaced by regret over the costs of owning.
Posted on 12/20/23 at 9:31 pm to AwgustaDawg
quote:
Buying a house to live in and calling it an investment has never been a good idea.
I have to disagree. I’m 50 and in my 4th home. Each of the first three I sold and came out with more equity than what I went in with. Even if I subtracted out the maintenance cost incurred during the time owning each of the houses I still came out ahead. Each time I rolled the increased equity into the next house. Have always paid enough extra each month on house note so that over course of the year, two additional notes were paid straight to principle. My current home will be paid off in about 5 years. I owe roughly $80,000 currently on my mortgage and could sell it today for $380,000. By the time it is paid off will likely be able to sell for about $400k. Once retired we won’t need a 4 bedroom 2400 sf house. Will likely sale and move to a more rural area and get a smaller home for around $200k and have the extra $200k to go towards our retirement.
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