Home to net worth %??

[ex_CFO_now_RVer]

Home value 5% of net worth!
In Rust Belt
30 year old Ryan built home, Northeast Ohio!

Paid $75k in 1983


Dave

 

[ladelfina]

Renting isn't necessarily any better:

Nationally, the average wage needed to rent a two-bedroom home is $15.78 an hour, up from $15.37 an hour in 2004.

On average, renters earned $12.22 an hour -- not enough to afford a two-bedroom apartment in nine out of every 10 markets.

The report quoted Sheila Crowley, President of NLIHC, saying, "The disparity between what people earn and what even modest rental housing costs grows larger each year."

From the end of 2005, bolding mine.  http://tinyurl.com/hz5fk

There's got to be a limit, or does there??


If median US household income is $44k, then the 3x income rule-of-thumb is also out of whack (at $132k). There was a previous thread on this which I'll go back and re-read.

My house at 1/3 of net worth but 14x my $40k planned w/d is probably "too expensive"! 

 

[Arc]

I'm trying to get an idea what a "normal" home value as a % of one's net worth should be.

For instance, if someone has a $1,000,000 net worth, what would you say the maximum one should spend on a home??

My wife wants a new home is the reason I ask...................

The most important words in your post are "my wife wants a new house" - I suggest you get her one!

 

[polloloco]

Home is approximately 10% of net worth which is calculated without the value of the home. Comprehende?

 

[Meadbh]

I got sucked into a blog called whyihatedc.. the guy showed this house:

http://whyihatedc.blogspot.com

What is the world coming to?

My Irish cousins visited Washington last year and thought house prices were a bargain!

For a hilarious socioeconomic analysis of current Irish society, read "The Pope's Children" by David McWilliams (www.davidmcwilliams.ie/).

Meadbh

 

[Meadbh]

Home is currently ~8% of NW and is mine, all mine!

With a planned ER date of 2013, I have identified my retirement location of choice and am researching the markets there. I plan to wait for the property market to setttle (no signs of that yet in Canada but I have 7 years!), then buy at the most advantageous time, for cash. If this is prior to ER date I will rent the place for income until I am ready to move, then sell my current home. As I live in Canada, there will be no tax on capital gains of my primary residence.

 

[mathjak107]

Yes. A paid off house is peace of mind when you are retired.

Yes. A paid off house should be included in net worth.

Yes. Liquid assets should be double or more of the house value.

It depends for what purpose and why you are figuring your net worth .For estate tax purposes i would count it,for a loan a bank would count it.
I prefer not to count a personal residence in net worth for retirement purposes unless i was ready to liquidate it.If i was taking a loan against it i would subtract out the loan though..I wouldnt count it anymore than i would subtract off my net worth  my future rent payments if i didnt own a house .A home is a consumption item until the day comes that your no longer consuming it.I have some origonal art work on my walls which i love.I dont count that either .Maybe one day ill want to sell them,at that point i would count it,same goes for jewelry.