Now that the market is becoming balanced, I am seeing a lot of articles predicting doom and gloom for real estate. I get it, nobody wants to read an article that says “The real estate market is about to become boring because it will neither be a seller’s market nor a buyer’s market”. They’ve got to go to an extreme to get and keep your attention. I am seeing lots of articles telling people that their home is not an investment. I’ve even seen some articles suggesting people continue to rent and get into the stock market instead of buying a home.
Which might be good advice if you were going to live in your car, or with your parents the rest of your life. Sure, you might come out ahead over the long haul, but the reality is you will have to pay to live somewhere, may as well pay to live in your own house.
Why did I want to buy my first house as soon as I could save the down payment?
I used to mow lawns for a lot of elderly people. I would always enjoy them telling me what they paid for their houses 30-40 years ago and what their mortgage payment was. I had one little old lady who told me her mortgage was $163 a month and some months it was hard to pay it.
When it was new, her house might have rented for about the same amount. Do you think rent prices have gone up since the mid 1960s? Meanwhile, that little old lady paid $163 a month until the house was paid off. (Okay, I am sure her property taxes and insurance went up, but not by that much.) And when she made her last $163 payment, do you know what she did the next month? Nothing. There were no more payments to make (Okay again, she would still have taxes and insurance to pay but both of those expenses would be FAR less than what the house would rent for at that time.)
Let’s take a look at what happens when this little old lady moves out of her house. She pays a real estate commission and gets to keep the rest because there is no mortgage.
What if she had rented a house that whole time and moved? She would have paid off the house for the landlord and had nothing to show for it.
I think owning your home is the best decision you can make.