owner-occupied housing plays dual role

1. it is an investment, and counts as part of your overall wealth;

2. it is a consumption that is part of  your overall living cost.

so it enters both side of your budget constraint, in economics terms.

if you cannot move due to job constraint, both side cancels. if your next house will be in the same town, and is going to bigger, then price appreciation is equivalent to inflation.

feeling good because your house has appreciated is euphoria. it does relax your borrowing constraint. however money borrowed needs to be paid back. 

of course investment property is different since it is only on one side of the equation. also if you are approaching retirement / downsizing, and are willing to move to a cheaper location to cash out house price appreciation, you benefit from price gains. 

to a large extent, house price appreciation is just paper wealth. other than making the owner feels good, it does nothing.

just my 2c.

 

 

 

 

 

所有跟帖： 

• So your conclosion is to rent a house instead of buying in bay a -风韵- ♀ (0 bytes) () 11/13/2013 postreply 14:26:44

• yes if rental yld is low -njrookie- ♂ (56 bytes) () 11/13/2013 postreply 14:34:20

• 回复：yes if rental yld is low -风韵- ♀ (403 bytes) () 11/13/2013 postreply 14:40:41

• when price goes up, everyone is happy -njrookie- ♂ (24 bytes) () 11/13/2013 postreply 14:59:41

• Congrats. Could you share where you buy in fl -Hellofriends- ♀ (33 bytes) () 12/23/2013 postreply 19:26:35