Even though the real rate of return of the U.S. national house price index was 1.3% from 1975 to 2009, the real rate of return on a typical home was below zero (–0.575%) over that period. That's assuming a 2.5% annual depreciation rate, a 1.5% property-tax rate, a 7% mortgage interest rate, and a 25% marginal income tax rate, according to Wenli Li and Fang Yang, writing in the Federal Reserve Bank of Philadelphia Business Review and quoted in Monthly Labor Review. "The case for trying to achieve a nation of homeowners needs to be rethought," the authors say.Insight from Tom: good reason to not buy a house as a forced saving mechanism. (Thanks, Tom)
Wednesday, May 18, 2011
The Daily Stat: ROI on Homes is Zilch Over Past 35 Years
From the HBR daily stat:
Why Women Aren’t C.E.O.s, According to Women Who Almost Were
"It’s not a pipeline problem. It’s about loneliness, competition and deeply rooted barriers." Read more in the NYT .
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Even women who earn overwhelmingly positive performance reviews are told that they have ‘personality flaws,’ a new study finds. The double...
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Many talented rural students don't go to elite schools, because they are unaware of the options. Read more in the NYT . Thanks, +Ju...
