Taking Stock of Housing Investments
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There is a fallacy that needs to be addressed in the article comparing housing investment with the S&P;, government bonds and gold in the article, “Location, location ... or timing?” (April 29).
The financial benefit of buying a home is that it does not require that the entire purchase price be paid at the time of purchase.
It also affords a family a place to live while they are earning a profit at the same time.
The only fair comparison would be to assume a small down payment, calculate the return on investment taking into account the monthly payments over the course of the loan, then subtract tax savings and the cost of housing for another place to live.
Oh, and the purchase price at the end should not be the contract price but should include interest paid to the bank.
When all is said and done, I suspect that the return on investment will be comparable to that of the stock market regardless of location.
Elaine Herold
Rancho Palos Verdes
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