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Comment by clipsy | Hacker News Reader

I don't want to speak for anyone else, but from my view making housing a bad investment while keeping it a sound financial decision for potential homebuyers is -- at the very least -- a difficult needle to thread. Being a "good" or "bad" investment is not some magical separate thing but a fundamental and integral part of determining whether home ownership is a smart decision.

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By bad investment I mean bad by the standards of an investment: it’s not something you’d buy because you expect appreciation. I don’t mean that you would expect it to lose value (beyond the usual depreciation of a physical asset).

Good point though, thanks for giving me a chance to clarify.

Again, though, I think you are imagining a hard-and-fast distinction where there is none. Fundamentally, if I'm considering buying a house, I have to ask myself what the projected financial outcome is if I buy a house versus if I invest the potential down payment and continue to rent. Asking people not to make this analysis is asking them to throw rationality out the window, and I'm not sure how that would help the situation in the slightest.

People should totally make that assessment, I just think the conclusion should be roughly “I will break even”.

Buying a single-family house should "net" you basically inflation (ignoring maintenance costs) over long periods of time.

So if the house cost $x in 1960, it should cost the same in 2023 adjusted for inflation (which can still leave you large paper gains that the IRS will tax you on if it goes over exclusions).

This view still considers homes to be an investment! You cannot eat your cake and have it too; if we evaluate homeownership financially it is fundamentally an investment (even if it is a complex, tax-advantaged, leveraged investment with myriad intangibles) and if we don't then how do we evaluate it? Give me some way, as a hypothetical potential homebuyer, to decide whether buying a home is right for me without making it an investment. I suspect you can't.

Compare it to renting only.

The value of my house is immaterial to me since I need a place to live and since I bought it my run costs are basically stable and less than renting.

Will I be able to resell it in 10/20/30 years? Probably. But it would still be worthwhile compared to rental outflows.

Total structural loss immediately after purchase would have been sad, just like a crash after buying a new car. But insurance exists for that.

It doesn’t have to be a good or bad investment. It can be something you pay for and use, and it provides actual utility. We could make owner occupiers first class citizens in our own society, having housing as primarily for housing people, with investment purposes secondary.

Owner-occupiers already are first class citizens in the USA (at least) as the total number of benefits angled toward home ownership are frankly insane.

The 30 year fixed-rate mortgage is an unnatural financial instrument.

Do you buy a car as a financial investment? No, you buy it to turn money into motion.

Housing turns money into living. Don't expect a financial return on things you buy to keep you alive

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