There are many people in the current market who are struggling to pay mortgages or facing foreclosure. Even those who are still managing to make their mortgage investments on time and in full often worry about the fact that their home’s value has likely fallen dramatically since the housing bubble burst. However, it is important to keep things in perspective: how important is the value of your home when it comes to the long-term outlook and your finances?
The real and true answer to this question is: not much. In truth, even if your home has retained a reasonable amount of value since the housing crash, you should not rely on real estate alone to provide for your retirement. Even though the current financial situation and the housing market do not look particularly inspiring, if you are planning on staying put in your home for at least another ten years, it is likely that the market will recover in that time.
During the housing boom, housing rates were rising at 10 to 20% per year. This was clearly an artificial rate and led many people to believe that investing in expensive homes was the way to a solid financial future. Due to the fact that these rates were inflated, this is not the reality of the case. The real value of a home is the fact that it is a place for you and your family to live and grow. When it comes to making financial decisions that will yield real returns, it is better to invest in the stock market.