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Comment by fizzbuzz123 | Hacker News Reader

So the Tax advantages and building equity are worthless and play no part in peoples desire to buy instead of rent. Ok

you should search what "opportunity cost" means. The market is highly inflated compared to other investments because people are blindly buying without thinking at almost any stupid price. Your comment is a perfect example of that.

You can leverage your money much better with a mortgage though. You just need a small down payment, but you get the upside (and downside) on the entire value of the home.

I'd also argue that most other assets are also highly inflated. The P/E on most tech stocks for instance looks a lot scarier than the overall real estate market. I'll add that people have been saying the Bay Area housing bubble will pop for over 30 years. It hasn't yet.

This is a bet on the future price of the home. And a lot of simulations have shown that you will come ahead in stocks unless you are in an exceptional growing market and not moving for at least 5 years.

There is a huge lobby in society to convince you that owning a home is the way to go (banks, real estate agent, other homeowners and people repeating this nonsense all the time). Don't let this fool you and make the calculations before buying anything.

I didn't say you could leverage it to guaranteed success, just that you can leverage a far larger amount of capital. That of course means larger risk along with the larger reward. No one is going to loan you 300k to invest in the stock market but they will to buy a house.

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