Betting the house
Many homeowners are aking themselves wheater they should cash in
on recent real estate gains and
rent for a while. But we are definitely in an unusual period.
Over the past five years, for instance, home price have shot up
5% a year
in real after inflation terms versus a long term historical
average of only about
1.5%.
The unusual gains suggest to some people that we're in the
middle of a real estate bubble.
But does that mean we should all sell our homes as fast as
possible to take
advantage of inflated prices?
Not so fast.
Home ownership is not only a financial decision but a lifestyle
choice.
Owning a home gives you the
security of knowing you don't have to move.
It's very difficult to find a home that you can rent where you
like.
The fact is that people who own homes tend to develop
their net worth a lot faster. Part of that is
because home ownership is kind of a forced saving plan.
It forces people to save and invest.
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Investment / Betting
the house |