Home Ownership Was Never a Road to Riches

There is a good article in the Wall Street Journal about this topic. The author (Neal Templin) starts out:

"My wife and I have sold all of our four previous homes for more than we paid for them—sometimes a lot more.

We’ve been pretty lucky. We’ve never overpaid much for a house, we’ve always bought in good school districts and decent neighborhoods, we’ve lived in neighborhoods where prices soared during the real-estate bubble, and we’ve been hurt but not decimated by the bursting of that bubble.

When I constructed a very basic cash-flow model for our home-buying history—selling price minus purchase price, renovations and repairs—it showed a roughly 3.5% annualized return on investment, from 1991 through the summer of last year. That’s when we sold our last home and bought our current one."

For the rest of the article:
http://tinyurl.com/m4xylp
The link works only for a few days. If you can't access the article, let me know and I will try to gain access for another short period. rich.chambersABC@gmail.com Spam prevention: Remove the ABC from the email address.

P.S. the number one reason home ownership does not lead to riches is that you have to live in it! Since you can't "spend" your home, it becomes wealth for your heirs but not for you. While it's true that some people can downsize and spend a portion of their home, it's quite rare when this is actually done in my experience. And yes, you can get a reverse mortgage, but this results in a significant wealth transfer to the reverse mortgage holder.