[wahern]

Unless you're already wealthy, it's difficult if not impossible to have access to a large investment that provides 5x (or more!) leverage. A home is a leveraged investment and security rolled into one.

Even if your mortgage interest is greater than property value appreciation you could conditionally still come out ahead as compared to the available alternatives.

Diversity, leverage, better appreciation: if you're not already wealthy you can really only pick 1 (maybe 2) out of the 3.

And this ignores the value of having stable monthly living expenses, something not otherwise possible without rent control. You can of course buy cheap land, but such places are typically remote from employment opportunities and, while possible, that approach is just another form of speculation--people will readily share stories about living in the country and telecommuting to a high paying job (successful speculation), but few would ever discuss how they ended up stuck in a cycle of minimum wage employment (unsuccessful speculation).

[ThrustVectoring]

>Unless you're already wealthy, it's difficult if not impossible to have access to a large investment that provides 5x (or more!) leverage.

That's wrong - the futures market is easily available if you have $10k, and offers rock-bottom costs for embedded leverage due to arbitrageurs. It varies based on the contract in question, but the two-year treasury futures contract offers roughly 400x leverage. Generally they offer you as much leverage as you can handle before overnight price moves will eventually wipe you out, so you definitely want to use less than they're offering.

[wahern]

Fair enough. That's what I get for trying to make a pithy point.

But what's your exposure? Home mortgages are almost always non-recourse loans, limiting your losses to your initial down payment.

I don't think speculation in the futures market is a very good justification to the argument that home ownership is in general a poor investment--IME the conventional thinking in economic circles. I stand by my larger point that home ownership is a categorically sub-par investment only for those already with substantial wealth.