Holy crap - what a misleading link title! Not only is the headline on HN right now not in the article, the very end of the article states there are many reasons to buy a home, but investing isn't a good one.
I tried bringing up the fact that prices and things simply cannot always go up in value... and got treated like I was insane. At the same time, I generally thought it was crazy that some people bought homes for investment purposes. While you might gain some things, you lose out on things like being able to get the landlord to fix the leaky roof and flexibility in moving if the local housing market turns sour. All in all, it seems one comes out nearly even in the best of times.<p>Now, alternative reasons for buying or building a house, however, is understandable so long as one can afford the payments. The want for privacy or doing what one will is a bonus. Those I've known that bought a cheap house and got it paid off in a short time wound up the best - even if their house lost value, it wasn't so important during selling time (if they even move). No house payments makes life easier.
Is this the furthest act of burying the lede of any article? Because it's literally the last sentence: "Shiller's work, however, says that you shouldn't buy a house simply because you're hoping to pump money out of it in the long run."
Even if your home never appreciates... one day when you are too old to work you will really appreciate a place to live that you only have to pay property taxes on.<p>However there are reasons not to own a house like wanting to be very mobile, not wanting the responsibility, wanting to live in more of a "group" environment, etc. If you live on the edge and can't save money then you shouldn't own a house because if you loose your job you won't be able to continue making the payments.
This title needs to change because it completely misrepresents the original article.<p>And it's wrong, too. "Never pays off" is simply stupid. My parents bought their house for $250k and sold it 20 years later for $1.4M cash. To say it didn't pay off is simply ridiculous. My own house is worth 50% more in 3 years, obviously unsustainable, but nonetheless worthwhile, especially given rents.
I think he means don't buy a house at the wrong time.. which is now because the gov't continues to over subsidize housing post crisis because america is a consumer economy and consumers only consume when they feel rich. How do you make a homeowner feel rich? Tell him that his house has doubled in value - sweet HELOC city - what could go wrong? (AGAIN) - Everyone and there mom should watch Jim Grant's speech at Google, the Keynsians are running a crazy world.
TL;DR<p>>| Shiller's work, however, says that you shouldn't buy a house simply because you're hoping to pump money out of it in the long run.
Obviously "never" is false. As with every type of investment it "sometimes" pays off.<p>I think the point of the article is just that it won't ALWAYS pay off (especially at a 10% growth per year thing). This should be common sense but maybe isn't. Lots of things should factor into a purchase decision. If timed right, a home can very much be a good investment, but is absolutely not without risk.
NYT put out a great calculator for this exact tradeoff <a href="http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html" rel="nofollow">http://www.nytimes.com/interactive/2014/upshot/buy-rent-calc...</a>. I personally have my own spreadsheet model as well, but the NYT calculator suffices for most purposes.
I'm not an economist, but if the Fed is printing money to pay off its debts faster than the economy grows, then I'm betting (and it could be misguided) that a hard asset like a house and land is worth more than quickly devaluing cash due to inflation. I wonder if his advice was more true 20 years ago than now.
This is silly.<p>Buying a house is making a calculated risk that you will stay in one area. While it will cost money in the short run, rent (in most places) tracks with inflation but a mortgage doesn't.<p>Now, it doesn't make sense to keep moving/upgrading every 5 years. If you do that (as I have over the last decade), don't buy a house.