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Comment by kindatrue | Hacker News Reader

Not mentioned: In America, owning a home is considered the most important investment you can make.

Who would've thought that mindset would lead to unaffordable housing!

Or parents telling their children that they won't be able to live near their parents because... well... investment! Like this guy: https://twitter.com/nextdoorsv/status/999364778907914245

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I would think owning your place of residence would be a pretty good long term investment most anyplace. It's practically a fundamental rule of the market; more expensive to rent than own long term.

It's practically a fundamental rule of the market; more expensive to rent than own long

That's not generally true. Look at the house price to rent scores. In many cities it's cheaper to rent than to own.

> I would think owning your place of residence would be a pretty good long term investment most anyplace.

The problem is that residential real estate values fluctuate unpredictably, and sometimes wildly, and the investment is almost always made using considerable leverage. Housing is unusual among the commonly made investments in that a person can seemingly do all the sensible things and lose all the money they've invested.

This is mainly a psychological trick: people are more disciplined about paying a mortgage under threat of foreclosure than they are about actually investing the savings from renting. But if you do actually invest the savings, they come out pretty close. There are a lot of costs to owning a home beyond the principal payment.

Even after the mortgage is paid off?

You have a pretty good chunk of capital (and capital gains) after investing in index funds for 30 years. That is, after all, how retirement works.

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