Housing’s new normal
I can’t recommend this post enough. Some highlights:
Home value appreciation between the late 1990s and the mid-2000s was an anomaly. In the eight years between 1998 and 2005, home values increased 117%, or 10.2% annually. By comparison, over the eight years prior to 1998, home values increased 12%, or 1.2% annually. Typical home value appreciation over the long-term is in the range of 2-4% per year.
. . .
Now that the real estate boom is over, people should return to thinking about their home more as a savings account versus a stock market investment. Or, a home simply as a place to live.
. . .
It is clear that the decision between renting and owning is becoming more of an economic decision to many Americans, informed by their particular circumstances, as opposed to either an emotional one or a decision made out of mere social convention.
Good stuff, read it all.