For example, I know people that were scared to take out massive mortgages in past years and instead saved. That turned out to be the wrong move. In our money printing world, it has been much better for folks to buy as much house as they can. The house appreciates and the debt is wiped away by inflation.
Yes if you saved in a savings account, you were screwed. If they instead bought the S&P 500, over the last 5 years they would be up 80%. Still having the bigger house is better than not buying anything at all, but there are many assets that are effectively as liquid as cash, which the government has bent over backwards to protect.
You're forgetting about how leveraged housing is though.
If you bought a 500k house five years ago with 100k down, and now it's worth 1m -- you've effectively gained a 500% return on your 100k, maintained your principle, and you could live in your investment to boot. A house with 20% down (or less) in many housing markets would have blown the S&P out of the water in the past several years.
Yes, you can leverage in the stock market too -- but rarely at a 4:1 ratio -- and if you did leverage up too much, you would have been wiped out by a margin call in 2020.
Leverage, and refinancing. It's not like taking a mortgage locks you at that market rate. With refinancing, you can take advantage of market rates to improve your leverage even more.
I refinanced last year to a 15-year mortgage at a sub-2% rate. The math happened to work out that my payments didn't change, but it halved the amount of my payment going to interest each month. Which, in turn, accelerates my payoff date by about 10 years.
Yeah, but those other assets don't let you live in them. You have to subtract out the cost of your rent for those other assets if you want to compare it to a house.
My mortgage for my house I just bought costs me $7k a month including taxes and insurance. Of the $5.3k I pay a month to service the debt, ~$3k just interest on the debt. Only $2k goes towards paying down the principal.
Which means that I'm forced to pay down this mortgage by $2k every month instead of investing it into stocks. If my house value goes up 50%, that's fine, but if it doesn't or goes down, then that could be a big missed opportunity.
People need to live somewhere. You're either gradually buying yourself property or you're gradually buying your landlord property. Your scared friends weren't saving that money. They were just paying rent instead of making mortgage payments. If you're referring to the down payment, the only economic difference between holding $X in cash versus holding $X in home equity is home equity is going to appreciate faster in most decades. They're certainly punished even more by inflation, but they were already being punished.
For example, I know people that were scared to take out massive mortgages in past years and instead saved. That turned out to be the wrong move. In our money printing world, it has been much better for folks to buy as much house as they can. The house appreciates and the debt is wiped away by inflation.
This kind of environment isn't sustainable.