Cornflakes
Active member
Just read somewhere that Home price index was 100 in Year 2000, and it stands at 225 as of now. That would mean a US home (sample) purchased in 2000 for $100k would be worth $225k today. If a borrower put 20k down, and 80k loan, that 20k is now worth 225k-40k balance on mortgage = 185k.
One could say that the 20 years of interest, taxes etc. were paid in lieu of rent and hence considered housing costs.
In contrast, if one had put $20k in S&P 500 and just took stock of the value today, that would be worth $77k.
Did real estate kick butt of stock market over last 20 years period?
It is a believable analysis based on what I have seen but it sounds too good to be true.
One could say that the 20 years of interest, taxes etc. were paid in lieu of rent and hence considered housing costs.
In contrast, if one had put $20k in S&P 500 and just took stock of the value today, that would be worth $77k.
Did real estate kick butt of stock market over last 20 years period?
It is a believable analysis based on what I have seen but it sounds too good to be true.