re: Percentage of net worth "invested" as equity in your primary residence?

All of this is good stuff.

Exactly the kind of debate I was hoping for.

Some replies:

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As a portion of my net worth, my primary residence represents 10%.

However, I'm not sure what that has to do with anything.

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I'm phrasing the question this way because I have more assets than someone my age and in my salary range would normally have. My thought is I can "afford" a higher priced house than my salary allows by putting a larger down payment down than I normally would, thereby reducing my mortgage payment down to a level that fits into my budget.

Let me give you an example. Let's say I had $50k of equity in my current house, and my net worth was $2mil. That would mean that I only had 2.5% of my net worth in my current house. If most people live comfortably with 10% as equity that means I could purchase a much nicer/larger house and retain my same, small mortgage payment.

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You live in Huntsville, Alabama which is basically subsidized by the government in terms of what is growing the local economy. If the national government cuts defense spending, your $500,000 house just went to $250,000.

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Well aware of this. In fact, defense has been cut...7% by sequestration for almost a year now...As has NASA's budget another large part of the economy here. Having said that, I might wait to see what the 2016 administration looks like, and by then we'll know more about NASA's Space Launch System's long term outlook as well.

My deadline to move is about 3.5 years. Part of the reason to move is to get into a better school system.

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I'm all for buying a home that you could be turned into a rental if he lost his job.

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I work for the government. If I lose my job, there will be no market for rentals because if I'm out of work lots of others will be as well. Plus, my current house would be perfect to turn into a rental, my next potential house would probably be too expensive to turn into a rental.

I haven't decided yet if I want to sell or rent my current house. It's 1900 sqft, 4 bedroom. Could probably generate $1200/mo rent. Rental market is great in my location.