Updated
Updated · HousingWire · Jul 15
HousingWire Chief Rebuts $500,000 Home-vs-Stocks Case, Says 30-Year Mortgage Still Builds Wealth
Updated
Updated · HousingWire · Jul 15

HousingWire Chief Rebuts $500,000 Home-vs-Stocks Case, Says 30-Year Mortgage Still Builds Wealth

2 articles · Updated · HousingWire · Jul 15

Summary

  • $100,000 put down on a $500,000 Nantucket home in 1995 would have produced more than $3 million in equity after mortgage payments by 2025, the HousingWire leader argued, challenging a Bloomberg op-ed's claim that houses are no longer the best place for money.
  • The rebuttal says the op-ed used the wrong comparison by matching a full $500,000 home purchase against a $500,000 S&P 500 investment, when most buyers finance homes and should compare the down payment instead.
  • On that basis, the same $100,000 invested in the S&P 500 with dividends reinvested would have grown to about $2.5 million, versus a home value rising to roughly $4 million and still leaving more than $3 million after principal-and-interest payments.
  • Nantucket's nearly $4 million median home value also makes it a poor benchmark for broad claims about U.S. homeownership, the piece argues, likening it to using Amazon stock to represent all equities.
  • Beyond returns, the HousingWire leader says a home should be viewed first as shelter offering stability, privacy and community, while warning that flawed comparisons could discourage buyers and distort views of homeownership's role in household wealth.

Insights

Beyond extreme markets, what does a realistic home investment return look like for the average American family now?
As financial logic is debated, does a home's true value now lie beyond the numbers on a spreadsheet?
Is the 30-year mortgage a path to wealth or a trap in today's high-priced market?