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|Subject: Re: Affordable or Market-Priced Home a better de||Date: 11/27/2012 10:50 PM|
|Author: sykesix||Number: 13647 of 14162|
For this if the house goes up 10 percent a year for 5 years the value would be about 420,000 dollars or a gain of a 140 percent on your initial investment.
That's a lot of appreciation. Historically, housing prices have appreciated at close to the rate of inflation.
I don't have time to do more than a back of the envelope right now, but.for argument's sake let's say puts down 20% on either house,
If the expensive house only appreciates at 2%, he gets $49K in appreciation over the ten year term vs. $31K for the cheaper house. But he saves he saves roughly $46K in payments on the cheaper house.
I'm neglecting the difference opportunity cost in the downpayment, but that's probably pretty small.
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