No. of Recommendations: 5
The blog link posted is approximately accurate, but has some obvious flaws, for instance, they don't seem to know how much the income tax standard deduction is.

About the only way you can make money on your primary residence is through inflation. Over time, inflation will drive up rent and you have to keep paying more and more rent forever. But once you have bought your house, you lock in your price for all time. If you move, you reset the price, but you also gain the benefit of your house's own appreciation, which is almost guaranteed to at least keep up with inflation (except the past 2 years). Since the late 90's, the housing market has been topsy turvy, but historically, "house as source of capital gains" is not really the big thing; the blog is correct on that point. Over the very long term, home price increases will approximate inflation. This is why I believe we still have a very long way to fall.

Because almost everybody refinances or moves before they significantly pay down their mortgage, and resets to a 30 year term, it's not really appropriate IMO to consider the whole upside of "once you get about 10 years in, you really start paying it off!" In reality, for most people, once you get about 10 years in, you move or refinance to get "lower payments" or "cash out" and start all over. For most people, all mortgages are approximately interest-only!

Once you factor in taxes, repairs & maintenance, homeowner's association dues, realtor's fees/closing costs and mortgage interest, you have pretty much spent as much as you would on rent. I find it particularly amusing that most people cite tax advantages as a reason to own a home, since property taxes usually far outweigh the net income tax deduction. You can get more living space, and you can certainly get more flexibility (want to knock the whole thing down and start over? Go ahead!) but you do not get a lot of financial savings. Buying a home is an expenditure on improving your quality of life. The investment aspects are very, very secondary.
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