I'm not particularly knowledgable about housing so I could be wrong here - but if another 2008/2009 happens, you can just keep the house and wait for prices to recover. There are some assumptions baked in:
- Either you don't plan on moving or you can cover a substantial amount of your mortgage from rental income if you do move.
- You're not overleveraged. If you lose your job or take a pay cut due to a recession, you can still continue making mortgage payments on your house without risk of foreclosure.
Caveat: There are probably some areas where housing prices never fully recovered after the 2008 financial crisis. But there also areas like the SF Bay Area, where the housing market is doing well even in the midst of wildfires, a pandemic, and tech employees fleeing the area in U-Haul trucks. As with all investments, nothing is guaranteed. For what it's worth, your run of the mill index fund would have taken a huge hit in 2008 as well. It wasn't just the housing market.
- Either you don't plan on moving or you can cover a substantial amount of your mortgage from rental income if you do move.
- You're not overleveraged. If you lose your job or take a pay cut due to a recession, you can still continue making mortgage payments on your house without risk of foreclosure.
Caveat: There are probably some areas where housing prices never fully recovered after the 2008 financial crisis. But there also areas like the SF Bay Area, where the housing market is doing well even in the midst of wildfires, a pandemic, and tech employees fleeing the area in U-Haul trucks. As with all investments, nothing is guaranteed. For what it's worth, your run of the mill index fund would have taken a huge hit in 2008 as well. It wasn't just the housing market.