Buying a home is one of the biggest steps for many families. However, owning your own home can be just as exciting as it can be disastrous, and in the current economy many people find making that leap to be a little uncertain.
Warren Buffett currently owns two homes, one of which he bought in 1958 for $31,500. The other, a beach house in Laguna Beach, he purchased in 1971 and recently put on the market for a whopping $11 million. But, does Warren Buffett, the world’s foremost investor, a man who probably understands the economy and finances better than any of us, think that buying a home is a good move?
Well, according to an interview with CNBC, the answer is yes. Buffett thinks that “for a great many people” owning a house is a great idea and is a good asset. In fact, he says that for a lot of people it is the most sensible investment.
“If you know you’re going to live in a given area, or think it’s very likely, for a considerable period of time and you’ve got a family, [owning] the home is terrific,” Buffett said.
According to Warren Buffett, one of the things that makes a home a great investment for families is the 30 year mortgage. In fact, Buffett himself took out a mortgage when he bought his beach house, and Buffett is definitely a fan of the idea.
“If you get a 30 year mortgage, it’s the best instrument in the world,” Buffett explained. “If you’re wrong and rates go to 2% or something… you pay it off. It’s a one-way renegotiation. It’s an incredibly attractive instrument the homeowner.”