Most experts agree that you shouldn’t think of your primary home as an investment. Why? Real estate barely outpaces inflation over time. You can absolutely time the market, flip a house, or buy a rental but that’s different from expecting your primary home to earn you a return.  

Buying a home can be a bad investment but it doesn’t mean buying a home is a bad idea in general. Just because your home is a great investment doesn’t necessarily make it a bad purchase.

With any purchase, there is a matter of individual affordability. Avoid buying a home you can’t afford to keep. But how do you define affordable? There is the 20 and 25% rule. Which says that your housing cost shouldn’t be more than 25% of your take-home pay. 

The bottom line sometimes it’s smarter to weigh it all out and sometimes buying can work in your favor. Rather than giving in to one side or another, it’s more helpful to learn the rules, crunch the numbers then do what works and feels right for you.

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