This chart from Visualizing Economics calls into question the bedrock assertion that housing is a good investment, showing that its real value doesn’t actually rise.
The accompanying post says basically that all the asset building that people get out of homes comes from the difference in nominal price and a mortgage amount that doesn’t change with inflation.
What does this mean for those of us trying to help low-income people build assets, if anything? Does it change the calculation, or the policy? With the frequency people move and the cost of housing, it’s not like there are too many non-wealthy people (forget about low-income) buying habitable houses free and clear.
But there are lower income people who have stayed in one place long enough to have paid off their mortgage. Does this change how we think about their needs, their ability to finance repairs through home equity loans, etc.? Or do we figure that at that point those folks are considering their house’s value to be as a home, rather than an investment, and there’s no problem?