I read an “interesting” article on MarketWatch.com. According to Alex Tabarrok, an economics professor at George Mason University, housing is an “overrated investment”.
Read the article if you like to see if you agree but I find it strange and (more than a little) dangerous of a message. Especially when we are now seeing a deepening divide between renters and home owners in terms of family wealth. Take a look at the infographic above. It illustrates the most recent stats and forecast from the National Association of Realtors.
If renters can find (and actually invest in…this is the tricky part) investments that more reliable and as simple to manage as their own home, that would be great but I think that might be asking a lot. The fact of the matter is, most people will pay a mortgage each month (whether it’s their landlords or their own) but they are not nearly as likely to contribute the same amount of money to an investment strategy that will generate a higher return with the same effort.
What do you think?