Following up on yesterday’s discussion of this eternal question, Jeff Serenity (well, I’m guessing from his e-address — and hoping! — that’s his last name) notes that the ratio of the S&P 500 to the price of new homes over the past 36 years has never been more favorable for the ‘home’ side of the equation. “In other words,” he says, “it’s never taken so few ‘units’ of the S&P 500 to purchase a new home.”
So maybe this is a better time to buy real estate than stocks (or to buy Japanese stocks than US stocks, but that’s a whole different question/issue). And, Jeff suggests, it could be argued that one way to invest more in real estate, if you can’t actually afford another home, is to pay down a mortgage.
Well, yes and no. You’ve already bought the home; paying down the mortgage will not increase your real estate gains. When you pay it down, it’s not so much like buying more real estate as investing in a bond whose interest rate is precisely identical to the interest rate on your mortgage.
Still, I found the column by Dallas Morning News columnist Scott Burns from which Jeff drew this information to be just as interesting as Jeff did — http://www.scottburns.com/990119tu.htm . Thanks, Jeff! (Seinfeld fans: “Serenity now!”)
Quote of the Day
If a man is called to be a streetsweeper, he should sweep streets even as Michelangelo painted or Beethoven composed music or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of heaven and earth will pause to say, 'Here lived a great streetsweeper who did his job well.'~Martin Luther King, Jr.
Request email delivery
- Jan 16:
But Mainly . . . There Is No Crisis
- Jan 15:
Alexandria Ocasio-Cortez: The Green New Deal
- Jan 14:
Elizabeth Warren: Not Who You Think
- Jan 11:
- Jan 10:
Two Sonnets And An Investment Strategy
- Jan 9:
- Jan 8:
“Be Kind And Be Useful”
- Jan 6:
What Are We Waiting For?
- Jan 4:
High School Football Captains In The News
- Jan 3:
- Jan 16: