Finance

If you’ve bought a small starter house 10 years ago then you have lots of options when you want to upgrade. Your starter house should have appreciated and a good chunk of your mortgage payments have gone to increasing your own equity.

Do the math. The S&P 500 would've outperformed the equity in the starter house over most 10-year periods of time. The renter is in a superior position when bidding on homes, compared to the owner who wants to put in a contingency on the sale of their current home.

Plus look at what people are actually experiencing today: they're ready to upgrade in their home, but are finding that the equity they've built (from high housing prices) isn't actually enough to significantly upgrade (because of high housing prices). So they feel stuck in their old house that no longer suits their needs.

After all, if the starter home appreciates from $250k to $500k, that means other $500k homes out on the market are generally similar, and your equity can't actually buy as much as you imagined 10 years earlier.

And more to my point, is living in the same house for 10 years a mistake? For most 20 somethings, yes. That "starter home" is a compromise in lifestyle: extra bedrooms they don't need yet, commuting distance to work or to family, shitty neighborhood for dating, school district they don't need, etc. Actively planning to live somewhere for less than 5 years makes buying a mistake, but actively planning to live somewhere for more than 10 years requires a lot of contingency planning and anticipating changing needs (and sometimes living with those incorrect choices).