It’s an Asset if You Can Borrow Against It
You can also borrow against the value of your home — via home equity loans or lines of credit, attesting to the fact that all bankers consider your home an asset and will allow you to use it as collateral.
Yes, I know we’re in a credit crunch and bank-lending standards are strict now. But you get the point. If your house is worth more your loan (i.e. you have sufficient equity in it), then you can borrow against that house.
It’s an Asset if it Has Increased in Value or Can Increase in Value
Moreover, the home you’ve bought — or may be about to purchase — may appreciate in value over time, holding out the potential for a good return on your investment. Clearly, real estate markets don’t go up every year. One need only look at home prices from 2007 through 2011 to see that.
However, homes have historically risen at a rate of 6.6% annually, according to the National Association of Realtors. This growth has represented a significant form of wealth for countless homeowners nationwide. Meanwhile, stocks have experienced annual appreciation rates averaging 10% when you look at 10-year investment cycles for every decade going back to the 1920s.