[hansef]

But I'm buying a $500k house in 2015 dollars. If we peg the appreciation of the house only to the long-term inflation average of 3.22% over the next 30 years and I purchase the house today at current 30-year fixed rates of 4.09%, I'm going to pay a total of $868,713 over the lifetime of the loan for something which will be worth $1,178,775 (in 2045 dollars). I will have made $310,062 in 2045 dollars, while also having a place to live the whole time.

Even if we factor in other costs during that period beyond loan servicing, such as insurance, taxes, utility repairs and maintenance it seems unlikely I will have LOST money in the process.

It's not a terribly GOOD investment, but it's not a financially asinine choice either.

[alistproducer2]

Good points however 2008 broke the model of perpetual home appreciation. That's not to say your math doesn't work, I would just question the core assumption that makes it hold.

I'm deflecting though. Historically what you say holds up.