You bring a good point, but leveraging is absolutely required to make housing an even close to acceptable investment.

All the recurring and one time fees take away from the leverage.

Playing with the buy or rent calculator from the NYT shows you how leverage is an absolute necessity:

https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...

> leverage is an absolute necessity

Yes, in more ways than one. To juice returns, sure. But the main reason people lever into real estate is because they don't have the cash to buy. So most homebuyers enter into a favorable high-leverage asset whose gains are given preferred tax treatment.

Discussing residential RE as if leverage is optional is not useful.

Sure, but discussing it as a "juicy" investment that returns 5x the upside because you are leveraged 5x is also a false narrative that doesn't include all the fees and costs.

Not to mention risks!

Real estate, at least the land aspect of real estate, should never be an investment. It leads to misallocatiom of resources and rentierism.

The only aspect of "investment" should come from proper maintenance of structures, and replacing structures with greater density as soon as the land values justify it.

Home ownership as investment has been a generational disaster

And it is a non-callable loan, unlike borrowing $300k from your brokerage to invest in VOO. And many states require it to be a non recourse loan. And due to the backing of the federal government, it offers a 30 year fixed rate. The public subsidies are insane.

Non-callable, can be refinanced at buyer's discretion, broadly standardized so there's a competitive mortgage originator/refinancing market, and can be borrowed against by using that same market (HELOC or home equity loan)

There's a lot of mortgage features that make it attractive to "I'm not an Accredited Investor" types.

The interest is also deducted from the borrower's AGI. USA being nearly the only country that subsidizes loan interest.

https://www.stlouisfed.org/open-vault/2018/may/why-economist...

https://www.economist.com/finance-and-economics/2017/02/02/w...

https://www.economist.com/free-exchange/2010/09/13/dont-defe...

https://www.economist.com/briefing/2015/05/16/a-senseless-su...

https://fivethirtyeight.com/features/the-tax-deductions-econ...

I don't know about you, but I would have to significantly upsize before the mortgage payments exceeded the standard deduction my wife and I receive as a couple. In my market, the mortgage deduction is effectively dead.

It is dead for 90% of American tax filers since 2017 TCJA. But those juicy standard deductions end at the end of 2025 too, so could be only a few more years before the mortgage interest tax deduction is in play again for many.

Interesting. On the one hand I think it would be political suicide for pols to fail to extend the standard deduction, but on the other hand I think we're going to require substantially higher taxes in the near future to avoid financial repression, currency devaluation(no, not Weimar Republic levels...) and inflation. Should be interesting...

The petrodollar and the dollar's globalization seem like the tipping points.

If either of those substantially changes, the US budget to inflation link becomes very different, because there won't be external sinks to soak up extra dollars.

Globalization will change on glacial timescales. And the alternatives don't look great: Euro (economic concerns), yen (economic concerns), yuan (economic and political concerns), ruble (economic and political and sanctions concerns), rupee (maybe if SE Asia gets its economic integration in order), naira (would need scale from other major African economies)

Oil being sunset is going to be fascinating macroeconomically, as a huge part of the US' world economic power flows through Saudi Arabia.