Housing Bubble 2: Return of the Ugly

That isn’t what I’ve heard but there’s a strong argument to be made for that choice.

Generally a house is not a proper vehicle for retirement savings, and its value will usually appreciate well below market benchmarks, if at all. (The only exception is if you plan on monetizing it somehow, like buying a multifamily house and renting to others, etc.)

Given housing price inflation, homebuyers must lock up an increasingly significant amount of capital in home equity, starting with the down payment.

This means that, in the vast majority of cases, buying a house has significant long term opportunity costs, considering what that capital would be worth when properly invested. So unless you have already maximized a bunch of other superior savings vehicles and still have enough annual surplus to convert to a down payment, it’s going to downsize and/or delay your retirement.

Owning a home can give you a lifestyle and long term control you don’t have renting but, given how compounding interest works, that control will come at an extremely high price.

If people and corporations were not allowed to treat residential housing as an investment, this problem would diminish over time, but here we are. In America, a house is never just a house. It’s an idea.