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I think lots of people just want to own a home because of the psychological difference between being a tenant and being your own landlord. Most people aren't sophisticated investors, and the ones that are trying to be wise with their money still are probably thinking in simpler terms than grand economic fundamentals.

Yeah, this is totally normal i think, to want to live in a house as your home and never worry about the landlord jacking up the rent etc.
buying a house to live in, raise a family etc is the way

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