well, with many people that bought in 03-06, there houses are worth less than half, or they already lost it. So, non homeowners who have seen friends or co workers go thru this, lose money and their homes, want no part of it. Do U know how much money people have lost?

Robert Schiller's long-term study found that the wealth building effect of owning a home comes from the tax advantages (deductible mortgage interest and the tax free treatment on gains when it sells). Other than that the increase in home values really just track the rate of inflation (except for the recent bubble of course).

A home is a place to live, not a way to build wealth.

The people that lost their homes in '03-'06 probably made unwise decisions by accepting a "floating" APR. When the rates suddenly rose, they were forced into foreclosure.

I disagree that a home is not a way to build wealth. 25 years from now the difference between a renter and a home owner is that the home owner will more than likely have a house that is paid off and the renter will have nothing.

i dont know who thought up the concept of using a home to "build wealth" but it needs to stop. that makes people think $$$. owning a home is a way to build financial security. there's a difference.

re the fact that 1/3 of americans say they'll never be able to own a home. so what? there's a lot of people who do not have the maturity or common sense to handle owning a home. i see it everyday.

Owning a home does make sense now, if you are not so unfortunate to have bought during the boom. The traditional strategy of "buy low and hold" will remain effective. Too bad so many of us younger people, who were encouraged to buy over the past 5 or 6 years, will be underwater until lord knows when.

Home ownership is definitely not a way to build wealth. However, if politicians had not approved over-building in Florida, which caused bears and alligators to have to wander around the suburbs because their natural habitats were usurped, there would be have been a more equal supply and demand for homes. This would have helped stabilize home values, kept older neighborhoods revitalized, and would have left a place for Florida's other creatures to live. We all would have lost less.

Home ownership is definitely not a way to build wealth. However, if politicians had not approved over-building in Florida, which caused bears and alligators to have to wander around the suburbs because their natural habitats were usurped, there would be have been a more equal supply and demand for homes. This would have helped stabilize home values, kept older neighborhoods revitalized, and would have left a place for Florida's other creatures to live. We all would have lost less.

I think Schiller makes a lot of sense. But you can't just look at the house payment as an investment. Fact is, if you didn't have a home, you'd be renting and the money would be gone. I've seen houses go from being investments back to homes again. And that's where we are now. With shelter, pure and simple

Let's see... 1) $500,000 capital gains exemption on primary home sell, 2)annual mortgage interest and property tax deductions, 3) first time home ownership incentives, 4) leveraged ownership via borrowing with attractive subsidized borrowing practices. Is it any wonder that home ownership as an investment is completely artificial and government supported. It is an artificial economy supported under the goal of economic stimulation and "home ownership is good for the citizen".

It can be in the right circumstances. It can be the opposite under other circumstances.

But primary home ownership shold be only the roof over your head...not the investments of your life.

Let's see... 1) $500,000 capital gains exemption on primary home sell, 2)annual mortgage interest and property tax deductions, 3) first time home ownership incentives, 4) leveraged ownership via borrowing with attractive subsidized borrowing practices. Is it any wonder that home ownership as an investment is completely artificial and government supported. It is an artificial economy supported under the goal of economic stimulation and "home ownership is good for the citizen".

It can be in the right circumstances. It can be the opposite under other circumstances.

But primary home ownership shold be only the roof over your head...not the investments of your life.

Land ownerwhip has alway created wealth, PERIOD.
However, sometimes it takes 5 years, sometimes it takes 10 sometimes it takes 20, but owning land has always paid off in the long run.
Problem is when a society thinks real estate is just another get rich quick scheme.
I bought my house last year for 280K, it's valued now at around 240K, but I'll bet anything, anyone, that 10-15 years from now it'll be valued at 500K, inflation not counted. Which is fine by me, I pay 1800/mo including taxes and insurance, same, or close to, as I'd pay for renting, so it's cash that I would spend anyway.
As long as population goes up land value and home values will go up. They never go up in straight line, but rather as a seesaw.

Owning a home used to be a way of acquiring wealth.
Since the devaluation of homes and the continuing increases in taxes and insurance, there is no more "perk" to owning a home. In many cases today it's a losing proposition.

About ten years ago, I asked my tax guy (former) "should I buy a house?".

He said, "I don't know, do you want to live in a house?". His point was that you don't do it solely based upon expected tax benefits (tax code is subject to change) or possible future price appreciation.

Very zen of him, unfortunately not the kind advice I want to pay $100/hr for so he had to go.