Very interesting but it would be more useful to see the first chart going back twenty years not ten. And maybe an even longer term chart too.
I find it strange that buying a home to live in is considered "ultimately a money-losing endeavour." Every person has to live somewhere, so if you factor in the cost of paying rent if they don't buy a home, then I can't imagine this being a losing proposition.
My own home would be a typical example I believe. Let's use simple numbers: Initial cost $200,000; Current value: $400,000 - over a 24 year time span. Mortgage, Insurance and property tax costs are roughly equal to renting. Cost of maintenance: about $50,000 (so far) So it would seem like I've gained a fair amount of value (not factoring in inflation).
Indeed, the comparison between renting and purchasing a home needs to be considered. In the long run, purchasing a property tends to be lower cost than renting.
By money-losing, we are referring specifically to the cost involved in paying off the home. If we were to combine the values in the purple line (aforementioned cost) and orange line (market value of the house), we would indeed have gained value. However, this is still minute compared with the return from renting the property.
Very interesting but it would be more useful to see the first chart going back twenty years not ten. And maybe an even longer term chart too.
I find it strange that buying a home to live in is considered "ultimately a money-losing endeavour." Every person has to live somewhere, so if you factor in the cost of paying rent if they don't buy a home, then I can't imagine this being a losing proposition.
My own home would be a typical example I believe. Let's use simple numbers: Initial cost $200,000; Current value: $400,000 - over a 24 year time span. Mortgage, Insurance and property tax costs are roughly equal to renting. Cost of maintenance: about $50,000 (so far) So it would seem like I've gained a fair amount of value (not factoring in inflation).
Hi John!
Indeed, the comparison between renting and purchasing a home needs to be considered. In the long run, purchasing a property tends to be lower cost than renting.
By money-losing, we are referring specifically to the cost involved in paying off the home. If we were to combine the values in the purple line (aforementioned cost) and orange line (market value of the house), we would indeed have gained value. However, this is still minute compared with the return from renting the property.
Hope this clarifies things.