I believe strongly in home ownership, and real estate in general. But with that said, I would caution people against thinking of their homes from an investment or wealth standpoint. Your home provides you with a place to lay your head and raise your family. Assuming you get it paid for prior to retirement, you can lead a relatively debt free life into your golden years. It's not an ATM. The only way to access the equity in a house is to either sell it or borrow against it. That's the mistake that so many people made last decade, and continue to make today. Americans are once again drowning themselves in debt. And they're again falling into the trap of taking out HELOCs and home equity loans (in addition to credit card debt), placing their homes in jeopardy if anything unexpected happens.
Although it certainly involves risk and a good, strong head for management, residential rental real estate can make a man of modest means well off (or at least financially secure) within 10-15 years. Not long after I joined this board, with the recession still ongoing and interest rates near record lows, I suggested to the younger members that they go out and find a house or (preferably) a duplex. Live in one half and rent out the other. Get a 15 year mortgage and screen tenants like you're working for the FBI. Fast forward about 8 years: the duplex would be half way through the amortization schedule (not half paid for, but time wise, they'd be half way there). By 2025, the property would be paid off. Let's say it was bought for $150K. By now, it should be worth probably $200K, depending on location. Let's say one half rented for $1000/month. With 10% down, at a 4% interest rate, the payment would have been about $1000/month. Throw in taxes, insurance and PMI (which could be removed once the property hits 80% loan to value), let's say the total payment would be $1500/month. OK, so the owner has to come out of his pocket with $500/month net to live in the duplex. But at payoff, he'll be netting roughly $1000/month (living rent free), assuming the rent never goes up. He could rent out the his side and have roughly $2000/month in net income. Take that income and go buy himself a single family home to live in with his new bride and raise some kiddies. The duplex would have been bought as an income producing investment, that had the side benefit of providing shelter in the medium term. You could stay there, but you wouldn't have to.
I won't name him. But one younger member in particular, I discussed this with. Granted, maybe he didn't have the mentality (or the credit) to buy a piece of property and do this. But if he had, look what kind of fine shape he could be in now.
A house, if it's to be your home? Yes. A house, that should be your home, but you're going to use it like an ATM? No. You're playing with fire, IMO. Buy it. Live in it. Raise your family there. Pay it off as soon as you can. But don't ever have it appraised or worry about what it's worth, unless you want/need to sell it and move.
Just my 2 cents.
