A growing number of Americans are rethinking the long-held belief that owning a home is the key to financial stability. With mortgage rates hovering around 6% to 7% and home prices still high in many markets, people are starting to ask whether the math makes sense anymore.
“Paying 6-7% in interest plus carrying costs for an asset that appreciates at 3-4% historically doesn’t add up,” a homeowner wrote in a recent thread on Reddit’s r/TheMoneyGuy.
Locking In Costs Or Locking Yourself In?
While homeownership has traditionally been viewed as a way to build equity and lock in housing costs, many commenters say that picture is more complicated today. “Your primary home isn’t an investment. Don’t treat it as one,” one person wrote. Another added, “Owning fixes your largest living expenses, for the most part.”
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But others pushed back. “I’m not even sure it does that,” the original poster replied. “Principal and interest, yes. Insurance, taxes, maintenance? God bless.”
Indeed, many homeowners in the thread shared how property taxes and insurance have risen sharply in recent years. “Our mortgage goes up all the time but that’s mostly due to increased property taxes,” one homeowner said. Another noted their insurance had tripled since the pandemic.
Rent Vs. Buy Isn’t Just About Math
Several people pointed out that comparing rent and mortgage payments isn’t straightforward. One explained, “Rent is the maximum you will pay and mortgage is the minimum.”
Real-life examples added nuance. One commenter wrote about a house that sold for $1.9 million and underwent a $500,000 remodel, leaving the new owners with $2.4 million invested and a $20,000 monthly cost. “This is not a one-off situation,” they said. “I can show this in just about every area around us.”
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Another Redditor, who bought a home 25 years ago for $143,000, shared that their total ownership costs added up to about $350,000 while the home is now worth $600,000. “Rent payments over that time would have added up to about $680K,” they said. Still, others argued that comparing past and present conditions is misleading. “Today’s buyers aren’t the same as those buying 25 years ago,” one person replied.
Leverage Or Liability?
Some commenters argued that using leverage makes owning worthwhile. “4% appreciation equates to 20% for someone buying a home with 20% down,” one said. But OP wasn't convinced: “Leverage only makes sense with positive cash flow. You are not positive cash flow on a primary residence.”
Still, others pointed to eventual equity. “Ask anyone who has a paid-off mortgage if they’d go back to renting now. My guess is none of them would,” one person noted.
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A Question Of Priorities
Some said the real value lies in stability and freedom. “There is peace of mind when owning your home,” one person wrote. “Aside from job loss, fire, flooding, tornado, etc., nothing is removing us from this home.”
Others were direct: “Unfortunately, homeownership is a luxury now. If it was ever an investment, it always had variable returns mostly consumed by maintenance costs.”
In the end, the consensus seemed to be that buying a home isn’t a no-brainer anymore. As one commenter put it: “You have to live somewhere.” Just run the numbers and know what you’re signing up for.
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