# Home Ownership as an Investment **URL:** \ **Category:** Finance/Investments\ **Created:** [March 28, 2024, 8:30pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168 "2024-03-28T20:30:16Z")\ **Posts on this page:** 20\ **Page:** 15
**Author:** ![1695814](https://community.goactuary.com/user_avatar/community.goactuary.com/1695814/32/38506_2.png) [@1695814](https://community.goactuary.com/u/1695814)\ **Post date:** [February 11, 2025, 2:15pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/291 "2025-02-11T14:15:06Z")
They should add in the median age of the general population as well. ---
**Author:** ![Rastiln](https://community.goactuary.com/user_avatar/community.goactuary.com/rastiln/32/77682_2.png) [@Rastiln](https://community.goactuary.com/u/Rastiln)\ **Post date:** [February 11, 2025, 2:16pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/292 "2025-02-11T14:16:11Z")
![image](https://community.goactuary.com/uploads/default/original/3X/f/8/f8f1df9605a5caeefb405d3ddd3af863a9186f0f.jpeg) ---
**Author:** ![Fish\_Actuary](https://community.goactuary.com/letter_avatar_proxy/v4/letter/f/3ec8ea/32.png) [@Fish\_Actuary](https://community.goactuary.com/u/Fish_Actuary)\ **Post date:** [February 11, 2025, 3:05pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/293 "2025-02-11T15:05:01Z")
I did my part to pull up the median. ---
**Author:** ![Fish\_Actuary](https://community.goactuary.com/letter_avatar_proxy/v4/letter/f/3ec8ea/32.png) [@Fish\_Actuary](https://community.goactuary.com/u/Fish_Actuary)\ **Post date:** [February 11, 2025, 3:10pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/294 "2025-02-11T15:10:33Z")
I really dislike that these figures use the mean/median home sales price as I think it’s the wrong metric to use. I’d prefer the median price of homes purchased by first time home buyers. My contention being that first time home buyers aren’t the median buyer. They don’t have an existing home they’re selling, instead, they’re using their savings and possibly gifted money and are likely shopping for cheaper homes than the median buyer who have more accumulated capital to use towards a home purchase. ---
**Author:** ![Vorian\_Atreides](https://community.goactuary.com/user_avatar/community.goactuary.com/vorian_atreides/32/65623_2.png) [@Vorian\_Atreides](https://community.goactuary.com/u/Vorian_Atreides)\ **Post date:** [February 11, 2025, 3:38pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/295 "2025-02-11T15:38:28Z")
Not to mention that the median income of first time home-buyers is likely to be very different from the median of the entire working population. Also, I would also use “median mortgage value” as the comparison metric since this is the part the will emphasize the problem, IMO. Another metric I’d be interested in would be the comparison of monthly mortgage (P+I) + averaged maintenance costs vs. monthly rents. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [February 11, 2025, 7:42pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/296 "2025-02-11T19:42:53Z")
Rents are skyrocketing in a lot of places too, so the ratio of mortgage to rent might be going up slower than you’d guess. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [February 11, 2025, 7:44pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/297 "2025-02-11T19:44:56Z")
Maybe a good stat would be to look at the cost of a basic 3-bedroom, 2-bath “starter house” and see what percentage of non-homeowner households could afford the mortgage if they could come up with the down payment. Would be harder to calculate, of course. Where I live starter homes are getting hard to find. Developers buy up $350,000 starter homes and tear them down and put up $1,000,000 homes on the same lot. ---
**Author:** ![Vorian\_Atreides](https://community.goactuary.com/user_avatar/community.goactuary.com/vorian_atreides/32/65623_2.png) [@Vorian\_Atreides](https://community.goactuary.com/u/Vorian_Atreides)\ **Post date:** [February 11, 2025, 8:48pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/298 "2025-02-11T20:48:37Z")
> [@twig93](#): > > Developers buy up $350,000 starter homes A lot of places I’ve lived . . . the $350k home is not a starter home for most folks. That might be the starter home for the actuarial type, but even today, most starter homes I’ve seen are going to be under $200k . . . with “trailer homes” coming in under $100k. The trailer home info was about 5 or 6 years ago; not sure if that’s changed ---
**Author:** ![knoath](https://community.goactuary.com/user_avatar/community.goactuary.com/knoath/32/65607_2.png) [@knoath](https://community.goactuary.com/u/knoath)\ **Post date:** [February 11, 2025, 8:50pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/299 "2025-02-11T20:50:52Z")
Yes, the number of starter homes available has reduced a lot compared to when my parents bought their first house. Which makes the first rung on the property ladder a lot higher, requiring a lambeau leap just to get on it. ---
**Author:** ![1695814](https://community.goactuary.com/user_avatar/community.goactuary.com/1695814/32/38506_2.png) [@1695814](https://community.goactuary.com/u/1695814)\ **Post date:** [February 11, 2025, 8:53pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/300 "2025-02-11T20:53:28Z")
![image](https://community.goactuary.com/uploads/default/original/3X/3/0/3014ef9f68ce356d0c2455e1f1c4ee500101ffcd.gif) ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [February 11, 2025, 9:50pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/301 "2025-02-11T21:50:36Z")
Oh, in my area there’s not a lot under $350k. Some condos. I guess in other parts of the city there are cheaper homes. I mean where I live there’s not a lot under $600k, unless you back up to the interstate, actually. Then the homes are in the $350-500k range. Any home under $500k that doesn’t butt up to the interstate is bought up by a developer and torn down and replaced. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [February 11, 2025, 9:56pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/302 "2025-02-11T21:56:47Z")
Yeah, it’s crazy. I’m astonished at what people are buying these days. Across the street from my church are $1.2 million DUPLEXES. As in, each half of the duplex is $1.2 million. If you want the whole thing it’s $2.4 million. On a busy-ish street that’s zoned for mixed commercial and residential use. Down the street from a hospital with a helipad so you WILL get woken up at all hours of the night when they airlift someone to the hospital (helicopters are noisy). Each duplex half is 4 bedrooms, 2.5 baths, about 2,800 square feet. For $1,200,000. I can’t believe people are buying them but they are. ---
**Author:** ![YankeeTripper](https://community.goactuary.com/user_avatar/community.goactuary.com/yankeetripper/32/946_2.png) [@YankeeTripper](https://community.goactuary.com/u/YankeeTripper)\ **Post date:** [February 11, 2025, 10:46pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/303 "2025-02-11T22:46:34Z")
Interest rates spiked. My sister had an 18% mortgage at one point in the 80s. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [February 11, 2025, 11:09pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/304 "2025-02-11T23:09:09Z")
My parents had a choice between a 22% fixed or a 19% variable. RE agent advised the 22% fixed but they opted for the 19% variable. Best move my dad said he ever made. ---
**Author:** ![T-roy](https://community.goactuary.com/user_avatar/community.goactuary.com/t-roy/32/9180_2.png) [@T-roy](https://community.goactuary.com/u/T-roy)\ **Post date:** [February 11, 2025, 11:14pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/305 "2025-02-11T23:14:11Z")
My neighbor just asked me if I’d like to buy his house. And then he’d rent it from me. I don’t see him moving at all, ever, and he’s a garden eater. I shouldn’t lose this deal! Then I’ll keep this house I am in and rent it out to 4-6 college peeps. Think think think! ---
**Author:** ![The\_Polymath](https://community.goactuary.com/user_avatar/community.goactuary.com/the_polymath/32/83081_2.png) [@The\_Polymath](https://community.goactuary.com/u/The_Polymath)\ **Post date:** [February 11, 2025, 11:31pm UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/306 "2025-02-11T23:31:32Z")
Only issue is your relationship with him is likely to change. Any maintenance or repair issue…he will badger you about it. Kind of hard to avoid a neighbour that is annoyed when repairs are taking too long. Also…if you need to raise the rent? Probably might get a bit akward ---
**Author:** ![T-roy](https://community.goactuary.com/user_avatar/community.goactuary.com/t-roy/32/9180_2.png) [@T-roy](https://community.goactuary.com/u/T-roy)\ **Post date:** [February 12, 2025, 12:34am UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/307 "2025-02-12T00:34:41Z")
Things we’d work out beforehand. But I will broach the subjects. Other thoughts? ---
**Author:** ![Triweasel](https://community.goactuary.com/user_avatar/community.goactuary.com/triweasel/32/159_2.png) [@Triweasel](https://community.goactuary.com/u/Triweasel)\ **Post date:** [February 12, 2025, 1:09am UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/308 "2025-02-12T01:09:57Z")
If you’re happy with the neighborhood and plan to stay you should go for it. Is it the house next door, or down the street? ---
**Author:** ![T-roy](https://community.goactuary.com/user_avatar/community.goactuary.com/t-roy/32/9180_2.png) [@T-roy](https://community.goactuary.com/u/T-roy)\ **Post date:** [February 12, 2025, 3:48am UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/309 "2025-02-12T03:48:01Z")
Next door. ---
**Author:** ![Triweasel](https://community.goactuary.com/user_avatar/community.goactuary.com/triweasel/32/159_2.png) [@Triweasel](https://community.goactuary.com/u/Triweasel)\ **Post date:** [February 12, 2025, 4:12am UTC](https://community.goactuary.com/t/home-ownership-as-an-investment/9168/310 "2025-02-12T04:12:03Z")
Guess it depends on your relationship with the guy how comfortable you are changing it. If you guys are good friends now that might change eventually. Having a place with dependable tenants that pays for itself is a nice backstop imo. [Previous page](https://community.goactuary.com/t/home-ownership-as-an-investment/9168.md?page=14) [Next page](https://community.goactuary.com/t/home-ownership-as-an-investment/9168.md?page=16)