7 sats \ 2 replies \ @siggy47 7 Mar 2023 \ on: Maybe Treating Housing as an Investment was a Society-Shattering Mistake bitcoin
I think this analysis is oversimplified. Remember that when you make thirty years of mortgage payments the dollars you are paying back in year 15 have far less buying power than if you were paying back market rent which was increasing each year. That's irrespective of interest rate lockins when you bought your home. It's a fiat driven, debt based corrupt system, but those who played the game are winning. Retirees who bought a home 30 years ago are far better off than those who rented for those 30 years. I'm not saying it's fair, and I'm not saying it will continue like this for the next generation. The system is collapsing, and that's a good thing.
I bought a house 8 years ago. My interest rate was ~1.5% for a long time; it has gone up to 3.3% now (I'm not in the US, we typically lock in interest rates for periods of 2-5 years). That's much lower than inflation. So it was essentially a free loan; a fiat short.
The property valuation has gone up more-or-less in line with the stock market, but compared to investing in let's say the S&P 500, I've lived rent-free for 8 years. In my mortgage payments, only a small fraction has been interest (which is the real housing cost); the majority has been principal repayments, which is effectively moving money from one pocket (bank account) to another (equity).
Moreover, I've earned rent by renting out rooms to friends. It's been a money-making machine for me.
The only asset that would have generated better returns is Bitcoin. But there are benefits to owning a home that can't be expressed in monetary terms: being the boss. No one can kick me out of here, I can plant things in the backyard, I can modify it, build sheds, infrastructure, develop the land etc. To me, these things give life meaning.
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Exactly. You really hit a home run. Congratulations. Even people who didn't do as well as you still likely came out ahead.
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