How do people justify treating a home as an investment?
I’m not a financial guru but I feel gaslit sometimes.
Everyone I talk to is just ok with their home being their biggest “asset” in their lives and they throw around lots of fancy words to tru to justify it but the whole thing makes no sense to me.
I get that housing is limited by nature, I get that housing is a necessity, but by those very attributes doesn’t that mean that housing should be as cheap as possible? Ergo, your house value increasing is a BAD thing.
Like if you got in early, seems like it would feel like you hit the jackpot, supposedly you would be hundreds of thousands in the green, but what does that mean exactly?
Your house isn’t a stock, or some other thing that you can sell and live without. You need it. The only thing being in the green means to me is that maybe you can get debt from your equity, which is fine if you have the cash flow to handle that, but most don’t.
Now in the event you bought early and paid off your house and don’t plan to sell, house prices rising would fundamentally make your life worse no?
Kills your flexibility. Even if you sell the difference in value if you want to upsize is way larger than before. Best case here is if you downsize or move away and keep whatever profit you have left.
Increased cost. House insurance will go up, renovations, among other things seem to get more expensive with house prices. No bathroom should cost $30k to renovate but here we are.
Makes you more reliant on the system. Even if your house is paid off, again, it’s a necessity. The consequences if something goes wrong, like insurance not wanting to pay out some catastrophic claim, or some other issue where you may be on the hook for your house is catastrophic. At this point it could financially ruin a family for generations.
I may be overlooking something, but I mean it seems to me that the only people benefiting from this shit are the banks and real estate agents.