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This article misses two points that are so basic that I'm shocked. 1) Home prices don't need to go up in order to make it a good investment 2) Banks pay a huge percentage of the cost of buying a house, but the consumer keeps 100% of the profit.

To use the example in the article, if you bought a house for $200,000 and sold it ten years later for $256,000, you didn't only make $56,000. You also paid down your mortgage over that time. A typical mortgage isn't much more than rent, so minus interest, that's more money for you. Also, you only needed to put down $40,000 and the bank paid the other $160k for the house purchase. So for $40k plus the cost of rent, you did pretty well. You also would have done better than renting if the house had only appreciated half as much.




> Also, you only needed to put down $40,000 and the bank paid the other $160k for the house purchase.

In this scenario the bank just creates the money out of thin air. And then they get to keep all of the interest payments.

So, yeah, it's good for the home owner, but it's great for the bank -- so long as most people keep paying back their loans.




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