Is buying a home today a good investment?

[Jonathan K]

Is buying a home today a good investment?

Case in point: If I bought a house in 2007 today, on average, it would be worth less than the loan I took out with the housing market crash. So, is this "American dream" a concept of the past?

Your thoughts please.

[KrozFan]

I don't personally view a house as an investment in the sense of "I'm going to get x% over the next few short years". To me it's a place to live. If you're going to buy a house to live in and you have everything in line it's good time to buy. If you're going to buy a house to keep for a few years and sell it's a volatile thing like stocks, which is why you can make good money on it.

As far as the american dream point, I think that was more of owning something that's your own, not making money with it.

[Gary Barzel]

I would say buying a home is a good long term investment if you have the money for it, and aren't using up all your savings. Although it might not gain value as quickly as something like a mutual fund, it will always be there for you to have. You also have the added value over a rental in which case your money goes to someone else year after year.

[devoutfan]

Yeah buying a home is definitely a good investment. The parity between rental rates and mortgage rates is VERY favorable.

[4jacks]

I agree with Kroz that a home is more that an investment. But putting that aside, a home is a Good Investment, if prices begin to rise. A home is NOT a good investment if prices continue to fall. None of us can predict the future, but we all have to guess to answer the question. I have pretty consistently stated on these forums that I think housing prices will continue to fall. I'm going to stick with that for now. But I think we may see the bottom in 2012 or 2013.

[Troy]

You used the word "home", so I'll assume you are referring to the purchase of a primary residence. I think it's a sound financial investment if (1) you can afford it (mortgage is no more than 1/3 of your monthly net income); (2) you pay down the principal; and (3) the value of the property does not signficantly depreciate. If you are asking whether current property values will drop further, who knows? Any educated guesses out there?