Purchase your home to live in it…and consider its long-term investment potential

In a story about how to buy a home amid a hot housing market, one expert offers this advice:

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Herbert recommended a different way of thinking about the timing of buying a house, one that I found much more comforting. “You ought to be making this as a housing decision and not an investment decision,” he said. If you’re buying a house, he advised, it should be because you want to live in it for at least five years, and ideally many more – which also will mean that even if prices fluctuate, you have a better chance of your investment appreciating over time. “The longer you stay in the house, the [less] your timing in this particular house-price cycle [will] matter,” he said.

This quote interested me for two reasons. First, Herbert says this is about buying a house and staying long term. Sure, the housing market might be crazy right now but a buyer should be thinking about living in the space for a while. But, then the advice pivots a bit to noting how this long-term view can pay off financially. The particular financial circumstances at purchase will fade away if the price of the home increases.

That financial considerations matter as people consider home purchases is certainly true. At the same time, the shift from seeing a home as a place for long-term living to primarily a financial investment is on display here. There are features about homeownership that Americans tend to like – you own the property, there is often some outdoor space, it is more private, it is a marker of success, and so on – that transcend financial conditions. Houses are more than just the dollar signs attached to them…right?

Perhaps it would take an extended period of a cooler housing market and other positive economic stability for houses to not just be financial investments. Or, the costs of homeownership in many places are already at a point where homes can only be viewed as financial objects.

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