Comment by zarzavat
3 years ago
It’s a rather abstract view of making money. Other houses also go up in value. You only make money from the difference between how much houses in your area are going up, and how much houses in the area you want to move to are going up. And that difference may well be negative.
The alternate is not owning the house and instead paying rent, which means your rent would have to be far lower than the appreciating asset (house) and the cost of servicing the debt (interest part of the mortgage)
That's certainly not the case in the UK. I'd be surprised if it were in the US
The primary reason buying a house is better is because the government has put it's thumb on the we scale to allow you to leverage the fuck out of your assets.
If you could get a loan of the same amount and yolo it into the stock market, I am not sure buying a home would come out better.
There's another piece of government interference that's a lot more relevant: it's a lot easier to get legal permission to start a company than to build a house anywhere remotely desirable.
If you live in a major metro area it is the opposite: the price of where you want to live to escape the rat race gets relatively cheaper
A lot of people are doing a cash our refinance so they can capture the gains from their house value.
I don't recommend it, but many people do.