The returns on housing have historically been so great because of the levera”ge and tax benefits associated with that leverage.”

sdr, Thanks for reminding me. I am recalling the last ten years and what those little down payments did since 1997.

From Patient,
“sdr, leverage only increases the return as long as lenders agree to charge less (after tax) than the rate of (after tax) increase in home prices.”

Patient Renter, If I understand you the paragraph below applies, if I don’t perhaps you could explain?

Interest rates don’t affect the appreciation outcome in an isolated fashion like that. As long as your fixed mortgage and costs are near ,at or less than what you would be paying for rent all appreciation and the tax benefits are gains regardless of the rate on the mortgage. As time goes by the mortgage(fixed) generally becomes progressively cheaper than rent ,principal gets paid down, appreciation at some rate is applied and viola the miracle of home ownership is in full gear.All these benefits can be aquired with no or little capital. Of course if the real market value is depreciating you are losing money and suffering opportunity costs as the wealth goes up in smoke, but any savings against rent and taxes,again regardless of the rate, off sets the depreciation.

Disclaimer: I am not saying anyone is throwing away money by renting right now.