We sold the house we raised our family in last summer, and it gave me the opportunity to compare the purely financial counter-factual question of “would I have been better off in financial terms renting, vs owning this house all these years”.
We saw a substantial capital gain, some of which was subject to federal taxation, had some sales expenses, which yielded the base “ownership” rate of return.
The counter-factual was a little harder, but I had some data on rental rates, and hard data on portfolio returns in the 401K. If one assumes that you had the discipline to put all of the “excess” income into the same portfolio mix as everything else in the 401K, it turned out, for us, that we would defiantly have had a better financial return by renting.
But that ignores the quality of life issues that come along with that more expensive mortgage. As the children grew older, we updated the back yard to better suit our summertime activities, we had the kitchen set up exactly the way we wanted it, added a mother-in-law unit when it was time to take care of an elderly family member etc etc etc.
There’s more to life than the amount of cash you have at the end.
So, this article isn’t wrong, per se, but it really does leave out a big part of the decision making process when it comes to how people decide where they’re going to live and raise a family.
I am a number cruncher—but I would tell anyone that quality of life issues are much more important than numbers.
You need to decide what your “quality of life” priorities are—and make decisions based on those.
I think you treated your house more like a “utility” as mentioned in the article.