--- title: As Home Prices Soar, More People Say Buying a House Is a Bad Investment description: With home prices rising and mortgage rates creeping up from record lows, more Americans say that buying a home is not a good investment. authors: - name: Sarah Hansen role: Senior Writer url: https://money.com/author/sarah-hansen/ bio: Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes. education: Northwestern University, New York University at_money_since: 2021 articles: 347 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://www.linkedin.com/in/sarah-m-hansen/ former_staff: true published: '2022-03-22T18:18:19.000Z' modified: '2023-12-19T04:16:45.000Z' section: Housing tags: - home prices - News word_count: 618 canonical: https://money.com/buying-a-home-bad-investment-survey/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo illustration of a couple of triangular house rooftops](https://img.money.com/2022/03/News-Buying-House-Bad-Investment.jpg) Conventional wisdom says that [buying a home](https://money.com/how-to-buy-a-house/) is a good investment: It allows you to build wealth as the house appreciates and you aren't paying rent to a landlord. But even as [home values climb](https://money.com/typical-home-value-1-million-zillow/) to new highs, a growing portion of Americans aren’t convinced that buying is the right move. A new [survey](https://go.morningconsult.com/rs/850-TAA-511/images/220321_US-Consumer-Spending-Report-March.pdf) from Morning Consult finds that the share of adults who said purchasing a home in their neighborhood is a bad investment was 12% in February — up 4 percentage points from the same month last year. This may sound surprising. [Home prices](https://money.com/typical-home-listing-price-400k/?amp%3Bref=%2Fcities-with-most-bidding-wars-homes%2F) are continuing to rise, and home values are appreciating at record rates. New [data](https://www.zillow.com/research/home-value-appreciation-incomes-30862/) released last week from real estate listing platform Zillow show that home appreciation in 2021 surpassed median income in 25 out of 38 metropolitan areas. In San Jose, California — a city with a median annual income of $93,000 per year — the typical home gained $229,277 in value in 2021, according to Zillow. That’s quite the return on investment. "More than anything, 2021 was a year of haves and have-nots, and the chasm between the two widening throughout," Zillow economist Nicole Bachaud said in a [news release](https://www.prnewswire.com/news-releases/your-house-probably-made-more-than-you-did-last-year-301505532.html). "Those who owned a home saw their household wealth increase dramatically." ## If you're staying put in your current home, consider refinancing your mortgage ### Refinancing with Rocket Mortgage (NMLS #3030) could save you money by helping you secure a competitive interest rate. Click on your state to view today's rates. [View Options](https://money.com/pr/ffcd835306d1?ap_referrer=%2Fbuying-a-home-bad-investment-survey%2F) ## Is buying a house a good investment? Of course, the same factors that are pushing home values higher are also making it more difficult for people to afford homes in the first place. A huge surge in demand during the pandemic combined with supply chain snags has created a serious shortage of new inventory. Add rising [mortgage rates](https://money.com/current-mortgage-rates/) (and the accompanying pressure to lock in a [monthly payment](https://money.com/mortgage-calculator/) before rates get even higher), and you have a recipe for soaring housing costs. Morning Consult’s report suggests that “recent pessimism" surrounding the investment potential of buying a home "could be the result of rising interest rates, as some consumers may feel that they missed the boat for affordable loans.” The report adds that “others may simply view current prices as prohibitively expensive, limiting their ability to afford other expenses or potential investments with a relatively higher payoff.” In other words, real estate is so expensive now that [other investments](https://money.com/how-to-invest-in-stocks/) might make more sense than a home purchase does. It's also easy to see that purchasing a home before the recent spike in prices would have made for a better investment compared to buying today. Even in the best of situations, buying a home is not a good investment for everyone. In a [blog post](https://www.iwillteachyoutoberich.com/blog/should-i-buy-a-house-now/) last year, *I Will Teach You To Be Rich* author [Ramit Sethi](https://money.com/this-bestselling-author-is-sick-of-experts-telling-people-to-stop-wasting-money-on-5-lattes-heres-what-he-says-will-actually-make-you-rich/) wrote that for many Americans, buying a house “doesn’t make sense for financial or lifestyle reasons.” He cautioned potential buyers against assuming that home values will rise (there’s no guarantee that they will) and said there are lots of reasons that a home purchase could be more expensive than you anticipate thanks to taxes, fees and unexpected repairs. This is especially true if you don’t plan to live in the house for the long haul. “If you know that you want to move in fewer than 10 years,” he writes, “you will likely make more money by renting and investing in S&P [index funds](https://money.com/how-to-invest-in-index-funds/).” Of course, [renters](https://money.com/rent-vs-buy-report/) aren’t immune from rising prices, either: Zillow found that annual rent expenses grew by 16% in 2021, and a one-year lease on a typical rental was $3,072 more expensive at the end of 2021 than it was at the start. ## Let's lower your monthly mortgage payment ### Refinancing your home at a competitive interest rate with Rocket Mortgage (NMLS #3030) means you could pay it off quicker and even save some money. Sound good? We thought so. [View Rates](https://money.com/pr/md0db47f78d4?ap_referrer=%2Fbuying-a-home-bad-investment-survey%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/buying-a-home-bad-investment-survey/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Housing", "item": "https://money.com/housing/" }, { "@type": "ListItem", "position": 3, "name": "Home Prices", "item": "https://money.com/home-prices/" }, { "@type": "ListItem", "position": 4, "name": "As Home Prices Soar, More People Say Buying a House Is a Bad Investment" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/buying-a-home-bad-investment-survey/#webpage", "url": "https://money.com/buying-a-home-bad-investment-survey/", "name": "As Home Prices Soar, More People Say Buying a House Is a Bad Investment", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2022-03-22T18:18:19.000Z", "mainEntity": { "@id": "https://money.com/buying-a-home-bad-investment-survey/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/buying-a-home-bad-investment-survey/#breadcrumb" }, "dateModified": "2023-12-19T04:16:45.000Z" }, { "@type": "NewsArticle", "headline": "As Home Prices Soar, More People Say Buying a House Is a Bad Investment", "articleSection": "Housing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2022/03/News-Buying-House-Bad-Investment.jpg", "width": 2880, "height": 1920, "caption": "News-Buying-House-Bad-Investment" } ], "author": [ { "@type": "Person", "name": "Sarah Hansen", "url": "https://money.com/author/sarah-hansen/", "@id": "https://money.com/author/sarah-hansen/#author", "description": "Sarah Hansen is a senior writer at Money covering all things personal finance. 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