Warren Buffett: Why Buying a House is a LOUSY Investment

Buying a house is usually a lousy investment. This 8 word sentence is enough to start a fight if you say it to the wrong person. But please, before you come at me with pitchforks, I’m not the one saying this. This is coming from legendary investor Warren Buffett. Let’s just say Warren knows a thing or 135 billion about money.

This video covers topics such as buying a house, renting vs buying, the housing market, does it make sense to buy a house in 2024, Warren Buffett real estate, Warren Buffett’s house, real estate, housing market predictions, and much more.

Make sure to always check out this video:
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As a bit of background, there is a mindset that renting is throwing away money or that buying a home is always a great investment. While these statements do have some merit, as Warren Buffett pointed out in that clip, they don’t tell the whole picture. Most people just look at the monthly mortgage payment and compare that to what it would cost to rent a similar place. They see that the mortgage payment is around the same as what their rent would be and say “yep that’s it. Renting a home is a waste of money. May as well buy”. However, there is much more that goes into it than just that. To demonstrate what I mean, let me introduce you to our friend John here.

John has been working hard and saving money for years. He has done everything right financially and now has the ability to purchase a home. Let’s take a closer look at John’s true cost of buying a house.

When buying a home, the first thing you have to consider is the down payment. In the United States, there are some companies and government programs that offer low or even no money down mortgage options. However, these types of mortgages are generally considered relatively risky. Just look at the wave of foreclosures that happened during the Great Financial Crisis. These foreclosures skewed heavily towards individuals and families that bought at the peak of the market with little or no down payment. That is why it is highly recommended that home buyers have at least a 10 to 20% down payment when purchasing a home.