Predicting that your home is situated somewhere you will be able to live and work in the future. Or that you will be able to sell it at a good price if this is ever not the case.
//for many people, this is close enough to the case. What’s the statistic: 75% of everyone never moves more than an hour away from where they were born (and 33% never even go more than one hour away)? Something like that.
Predicting that the country/city your home is in will preserve your property rights over a long period of time. Considering that, with very few exceptions, property rights were arbitrarily taken away from people in almost all countries in Europe, South America, Asia, and Africa over the last 80 years, this is a fairly large gamble.
//is this actually true for individual homeowners, though? This is a risk for owning a large capital investment, but my understanding is that individuals generally got to keep (or re-assert ownership of) their personal residence despite political turmoil.
Predicting that you will be able to afford insurance for your home at all times and that the insurance companies will payout in case of a disaster.
//again, this is kind of a tail risk that would be correlated with a loss of value in stocks, bonds, and any other wealth instrument outside of bullets and rations.
Predicting that you will want to live in the area your home is in for a long time, sufficient enough to account for the large overhead of moving when one is buying as opposed to renting.
//isn’t this the same thing you said in point #1?
Predicting that your home investment is wise enough to beat a conservative investment strategy plus the cost of rent.
//As mentioned in other comments, the cost of rent will, in the long term, equal the cost of ownership. In the short term, owners have a more constant expense, and are protected from sudden large increases in rent, should the area become more popular. Also, you can borrow against the asset at rates lower than the long-term average market gains, if you are treating it as an investment (though, in most places, home values are mostly constant, rising at around the general rate of inflation, in which case it’s not really an investment)
In conclusion, more than 63% of people wanting to stay in the same place for an extended (7+ years) period of time, and lock in their housing cost (which is the single largest line item in anyone’s budget) for that time, seems completely reasonable. Some percentage of renters would prefer to own, but don’t have the assets (cash + earning capacity) to acquire a residence; some percentage of people are very mobile, or in an uncertain position, and don’t want to be tied down to a medium-term contract, because they might need or want to move for any number of reasons.
Predicting that your home is situated somewhere you will be able to live and work in the future. Or that you will be able to sell it at a good price if this is ever not the case.
//for many people, this is close enough to the case. What’s the statistic: 75% of everyone never moves more than an hour away from where they were born (and 33% never even go more than one hour away)? Something like that.
Predicting that the country/city your home is in will preserve your property rights over a long period of time. Considering that, with very few exceptions, property rights were arbitrarily taken away from people in almost all countries in Europe, South America, Asia, and Africa over the last 80 years, this is a fairly large gamble.
//is this actually true for individual homeowners, though? This is a risk for owning a large capital investment, but my understanding is that individuals generally got to keep (or re-assert ownership of) their personal residence despite political turmoil.
Predicting that you will be able to afford insurance for your home at all times and that the insurance companies will payout in case of a disaster.
//again, this is kind of a tail risk that would be correlated with a loss of value in stocks, bonds, and any other wealth instrument outside of bullets and rations.
Predicting that you will want to live in the area your home is in for a long time, sufficient enough to account for the large overhead of moving when one is buying as opposed to renting.
//isn’t this the same thing you said in point #1?
Predicting that your home investment is wise enough to beat a conservative investment strategy plus the cost of rent.
//As mentioned in other comments, the cost of rent will, in the long term, equal the cost of ownership. In the short term, owners have a more constant expense, and are protected from sudden large increases in rent, should the area become more popular. Also, you can borrow against the asset at rates lower than the long-term average market gains, if you are treating it as an investment (though, in most places, home values are mostly constant, rising at around the general rate of inflation, in which case it’s not really an investment)
In conclusion, more than 63% of people wanting to stay in the same place for an extended (7+ years) period of time, and lock in their housing cost (which is the single largest line item in anyone’s budget) for that time, seems completely reasonable. Some percentage of renters would prefer to own, but don’t have the assets (cash + earning capacity) to acquire a residence; some percentage of people are very mobile, or in an uncertain position, and don’t want to be tied down to a medium-term contract, because they might need or want to move for any number of reasons.