Your Home Not a Nest Egg Anymore?
In This Post
I strongly disagree.
The Seattle Times shared this article by Dave Streitfeld of the New Your Times with us this morning entitled Your home a path to wealth? Experts say no. Stan Humphries of Zillow is quoted as saying, "There is no iron law that real estate must appreciate."
Streitfeld supports the opinion with a vague, "Instead, Humphries and other economists say, housing values merely will keep up with inflation. A home will return the money an owner puts in each month but will not multiply the investment." And Dean Baker of the Center for Economic and Policy Research says that after adjusting for inflation, values will never catch up.
Never? Never seems like a mighty long time. I remember hearing about a war to end all wars. I have to wonder what the purpose of such an article is. I have to wonder why an executive at Zillow would make the statements he made in the article. Is the entire history of home ownership completely reversed because of a three year aberration caused almost entirely by greed on EVERYONEs part.
I will concede that there are people who make a living from buying and selling houses, but they are not the people that drive the market.
Home ownership is a great way to build a nest egg. You won't be able to retire next week or next year because you bought a home today, but you will find rewards if you do continue to pay it off over thirty years, with a payment that never changes.
And if you decide to rent instead, then what happens? Well, the rents will go up every year or so. After all the landlord has to cover the taxes and other expenses. What happens is, you've created a nest egg for the property owner.