American Dream: Is Your House Your Greatest Investment?

36% of Americans believe owning a house is the greatest investment you can make, but is it? In the 8th episode of Greenstream, we breakdown how many of us overestimate our returns by not factoring in true costs, which can be ~5% per year. After costs, fees, and taxes, real estate returns may be underwhelming but viewing a home as a consumption good also has non-monetary benefits. We evaluate how to make the most of your home as an asset, while avoiding overreaching and concentration risks.

Chapters
00:00 The American Dream: Homeownership as an Investment – 36% of Americans believe a home is the greatest investment you can make
03:09 Real Estate Economics¹ – most of us look at price return because evaluating real returns after costs is hard
08:56 Costs of Homeownership – approximately 5% annualized costs from transaction, maintenance, and property
13:56 The Benefits of Homeownership – leverage, well-being, and an inflation hedge
19:36 Buying a Home – funding down payments, not so changing transaction costs, and how much house you can afford
30:53 Concentration in Real Estate – understanding risks of real estate concentration on your personal balance sheet
33:13 Financing Your Purchase in 2025 – attention to detail in tax-efficiently turning appreciated investments into cash is important
37:18 Protecting Your Privacy in Real Estate – real estate is public, so how can you protect your privacy?
39:08 Refinancing Decisions – you can’t predict changes in future interest rates, so don’t count on it.
42:35 Remodeling – is a great illustration of a home being a consumption asset, since most have a negative ROI
44:43 Trading Homes – how to manage the timing mismatch of selling and buying in the most efficient way
52:11 Leveraging Home Equity in Retirement – reverse mortgages, downsizing, and funding long term care
55:28 Estate Planning Considerations for Homeowners – avoiding probate and premature gifting

¹ Gallup poll - https://news.gallup.com/poll/645107/stocks-gold-down-americans-best-investment-ratings.aspx

² Shiller real estate data - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=291281

Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.