r/Money • u/ImCoyyWR • May 03 '24

Is it worth buying a house in 2024, or renting?

25 years old, using my VA home loan. Just curious if it makes sense to buy a home, or wait for the market to subside and just rent?

I’m making 70k yearly, and pre approved up to 240k

Just wondering lol.

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23

u/eat_sleep_shitpost May 03 '24

"Gaining equity" is kinda irrelevant if you can invest the difference in cost and come out ahead.

13

u/Elegant_Record9340 May 03 '24

Land does not depreciate. Buildings can, stocks can, bonds can. Land will not.

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u/eat_sleep_shitpost May 03 '24

Ok? And in the past 120 years stocks have outperformed real estate by 9% or more. What's your point?

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u/Mandajoe May 03 '24

That’s not accurate

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u/eat_sleep_shitpost May 03 '24

Residential real estate has appreciated by 0.8% annually from 1915-2015. It's not even close.

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u/Mandajoe May 04 '24

Tell that to a Realtor, lol

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u/eat_sleep_shitpost May 04 '24

It's literally hard data. The case-Shiller home price index. But alright, champ.

I was also wrong. It was 0.6%.

https://journal.firsttuesday.us/real-estate-a-disappointing-long-term-investment/54141/#

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u/Mandajoe May 04 '24

there are lies, damn lies and then statistical data.

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u/pablotweek May 03 '24

Even if you use CPI adjusted figures, not even close, especially over the last 30 years. You're suggesting home appreciation doesn't even outpace inflation. That would mean houses are getting cheaper. Is anyone under that impression?

It's closer to 4-5%. Plus a home is a leveraged asset. So your investment better make a multiple of that ROI.

There is a rent vs buy calculation which, given current interest rates and the larger federal standard deduction, might make renting preferable in some cases. But do it with the right numbers.

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u/nikzyk May 03 '24

Google stock vs real estate returns over the last 100 years it is true.

0

u/DirtyDiamondHustler May 03 '24

Again, not true if you’re looking at current Google stock prices & current RE market. Over the past 50 years? Perhaps. 🤔

3

u/DirtyDiamondHustler May 03 '24

NOT true. With raw land at $12K/acre MINIMUM, there is NO stock that outperforms real estate ownership. Why do you think the 1% & their corporations now own more farmland than private owners?

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u/gimmetendies930 May 03 '24

This does not account for the money you safe by not renting, nor does it account for any rent you might receive from roommates or future tenants. It also does not factor in tax breaks and incentives for buying a home.

There is a reason why 99% of millionaires have some type of real estate, it opens up all sorts of ways to save on taxes and build wealth that stocks alone can’t do.

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u/EVOSexyBeast May 04 '24

It also doesn’t take into count property taxes, maintenance costs, homeowners insurance, interest, etc…

The argument you two are having is quite futile, because it depends on a lot of different things.

This all varies by location primarily. Past gains were apart of several factors, anyone who bought before the 90s has artificially reduced demand because minorities were excluded, zoning laws artificially reduce supply, and the areas most responsible for the real estate returns had amazing population growth. Now redlining is illegal and enforced, population in coastal states is decreasing, and people are starting to fight back against zoning laws. Are those 3 situations likely to repeat themselves over the next 30 years? Maybe, if you live in a more promising place like Texas.

But also, if you only need a 1 bedroom because you live alone, live in a coastal state, and take the difference in what you would be paying in maintenance, insurance, and property taxes, and invest it in the S&P 500 each month, it absolutely would probably be more of a net gain than buying a house in the long term.

However if you live in Texas, have 2 kids and need a 3BR, have a solid down payment, don’t stray far out from your budget, you would perhaps benefit more from buying a house.

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u/eat_sleep_shitpost May 03 '24

The first 20 years of a 30 year mortgage are like 85% interest. The reason why 99% (this stat is completely wrong btw) of millionaires have some type of real estate is because most people suck at being disciplined to save money and need to force themselves into a debt obligation in order to do so.

Most real estate owners do not get any tax benefits from owning property ever since the standard deduction was drastically increased in the 2010s.

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u/[deleted] May 03 '24

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u/EVOSexyBeast May 04 '24

You can get a loan to buy stock too.

Most people don’t do it though because it’s risky, but it has pretty much the same risk as real estate it’s just not normalized.

And you’re a landlord, you have a job.

-5

u/eat_sleep_shitpost May 03 '24

Cool, you invested into the perfect real estate market at an incredible time where appreciation didn't reflect reality. You got lucky. That's like saying you bought apple in 2005.

1

u/gimmetendies930 May 04 '24

You can buy a house now and have friends rent from you. You will still get far above stock market returns with hack hacking.

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u/Mandajoe May 04 '24

You totally missed the point! I invested in a down real estate market. I could only afford 90k. Had I bought a new build by the beach for 300k, my return would be over 5 million. DOLT!

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u/Mandajoe May 03 '24

Every time! Also stocks are diversified. my first property was mortgaged for 90k at 800 a month. It is currently valued at 540k. Today rents are 2400.00 each month. Had I bought stock it would be diversified with winners and losers. Diluting my gains. More millionaires are created by real estate than any other asset class. PERIOD.