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

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