Did We Forget? Home Ownership Is Still A Great Investment?

An Associated Press article from Friday points out what most homeowners already know - it still generally pays to own a home.

Even though prices are down significantly from the peak, they're still worth quite a bit more than they were a decade ago. In Seattle, the median home price is hovering at around $400,000 - compared to $237,500 in 1999.

While that may not seem like such a big gain, consider that the average homebuyer, then as now, typically buys with a five- or ten-percent down payment. So that initial investment, $12,000 down back in 1999, returned about $160,000 or so over ten years, more than ten times the initial investment. (As the AP article points out, that's a one-thousand percent increase!)

Even with 20% down, it's a return that exceeds 250%, 'way better than inflation.

The stock market? Well, in October 1999, the Dow was at 10,649. Yesterday, it closed at 9864. So the ten year gain there was ... negative.

Of course, we don't buy our homes just for the investment potential. Still, for the majority of homeowners who have been able to weather the bad times, real estate ownership has proven to be a pretty good investment. To quote the AP article again, with prices already having fallen so far, buying now could make it an even better one.