Nearly half no longer think owning a home is a realistic tool to build wealth

[disneysteve]

Originally Posted by jIM_Ohio

DS- if the house is fully paid for it is an asset, which can still accumulate wealth.

It is not a steady accumulator of wealth, it is not a reliable accumulator of wealth, but bottom line is that the house (and more importantly the land it is built on) has value and that value can represent either past accumulation of wealth or future wealth if it is ever sold.

I agree that it is an assets. Any tangible item that has monetary value is an asset. Building wealth is another issue, though. There are millions of people right now who would argue that owning a home has not helped them build wealth because the value of their homes has fallen 30 or 40 or 50% from what they paid and is now far below what they owe.

[poundwise]

A factor not yet mentioned is that how one buys a house may have a great deal to do with whether it is an avenue to building wealth or whether or not it is even better than renting.

If you put 3.5% down on a 30-year fixed term, you are less likely to consider that a successful move in 10 years than if you had put down, for instance, 20% on a 15-year term.

In the first case, your small equity position isn't likely to grow much since you are paying PMI and the lion's share of your payment is going to interest, not principal. Add in any need for major repair in that time-frame, or consider that you may face depreciation as opposed to appreciation in value, and the first scenario will likely play out considerably worse than renting and certainly not a means to building wealth.

How you buy doesn't guarantee success but it can certainly help mitigate risk. Too many people are sold the bill of goods that buying a home is a must and therefore buy with little down and little savings besides; a solid recipe for trouble.

[happygirl]

I see both sides to this argument. A house is a huge investment of money, time and energy, but if you rent you still invest a lot of money into rent every month and have nothing of your own to show for it years from now.

Our house is only a few years old so we haven't had to fix too much. Most of our investment since we moved in has been in landscaping, adding a deck, finishing off the basement, things like that. Well, and tons of interest every month on our mortgage!

Ultimately, I wanted a place that was our own where we can paint the walls any color we want, plant the trees we like where we like them in our yard etc. so home ownership is the right choice for us. And yes, I have a big dog too so a yard of our own was a must for us.

[irmanator]

I bought a small 35000 house in rural upstate ny. My mortgage is cheaper than my rent was. I have more room and a yard to have a veggie garden. I don't see it as directly building wealth but the money i save paying less and not having to buy veggies goes into my retirement and therefore indirectly builds wealth. Plus i get to have a dog and don't have to listen to neighbors partying.

[Seeker]

Yes, there are pros and cons to everything. Semantics is always the game?

Area is important to the renting versus home ownership issue. Costs are out of hand either way -- and certain areas here do not leave a beginning family with too many options.

But the point not stated here (or i've not seen it in this thread), is that when renting you don't have to directly deal with the repairs; but you have total complete control over repairs when owning.

When renting, you can report a malfunctioning garbage disposal and never will it get fixed. Same with windows leaks in the rare rain. Same when sharing a washing machine/clothes dryer with others in the complex.

Count me among the 50% that do think purchasing has been more cost effective for me.

[Well Spent]

I may only buy a single family home if I have children. I think financially and socially, it is better for a single person to rent. But if I have kids and a spouse, I would like them to enjoy a single family home with a patio and yard with privacy. I also don't like apartment buildings so I wouldn't rent one.