The home as an investment has been challenged during this recession. Some different type of loans for mortgages, particularly the adjustable rate mortgage, may have caused some of the equity fallout, but dropping home prices now make even financial experts wonder if a home is still a good investment. However with record low interest rates and low home prices, the deal almost seems too good to pass up. For those people who still have good credit scores, a 20 percent down payment, and the desire to buy, the home as an investment may be a moot point.
A Place to Live
A home is a place to live first, and many Americans still feel it is a cornerstone of the American dream. With so many other investments dropping in value, it can be hard to generate any income from any investment; however at the end of the day, you can still use your home as shelter. While it may not ever be the type of monetary investment it used to be, it still provides a solid foundation for families who want to invest in a specific community.
Schools and Neighborhood
Families with children still look for a home to provide stability for their children. Buying a home these days is less about an investment that you flip every few years as it is a chance to own some land and bring up your family in the neighborhood of your choice.
Long-Term Benefits
Owning a home in the short-term is not a wise investment anymore. However, long-term it can still provide an increase in equity over time. The home as a hedge against inflation is also important when everything is rising in price, including rentals. To keep from paying higher rental costs, it can make sense to buy instead, even when buying produces no short-term benefits. With a 30-year fixed mortgage it provides a hedge against inflation that can keep the family budget intact for very long periods of time, regardless of what happens in the economy.