Is your house a good investment?

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On February 24, Fox News ran an interesting story on homes as investments, specifically people viewing their primary residences as investments.  You can see the video here:

Nest Eggs Shrink as Home Values Drop

I have long thought that a persons residence was *shelter*, not an investment.  Sure, in some phases of the market, people have made good money on their homes.  But once you consider all of the expenses of home ownership, your personal home often only keeps track with inflation.  My first house only went up 2% per year.  A friend of mine once analysed a house that had been built in the mid 1850’s and determined that it had gone up 5% a year…about the rate of inflation.

That doesn’t mean you shouldn’t own a house.  There are lots of benefits to home ownership.  But todays market is bearing out the fact that, while a house may be home, it isn’t always a pot of gold.

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