Chart of the day – Aug 22, 2017

Aug 22, 2017.

Only worth in long run. Comparison of $100k down payment vs S&P index vs rent.

Investment in a house vs S&P index vs renting

(Click on plot to enlarge) Comparison of different scenarios when buying a house. A hypothetical case when planning to buy a $500k house in Portland Metro (at Zip 97124) with $100k down payment and a 30-year mortgage at 4% rate. Key scenarios: (1) the worth of house increased by about 50% over the seven-and-half years; (2) the total cash with $100k down payement+monthly mortgage added $270k cash to the equity; (3) however, the equity in house will be much higher at $401k; (4) if this amount regularly invested in an S&P fund, it will end up at $515k; (5) but when a monthly rent is paid out of this payment, the growth is much lower at $331k; (6) the equity is positive only after 5-and-half years; (7) the most practical scenario is red curve when part of monthly investment is paid as rent which takes a serious bite out of the investment, however, it is still a better deal for first six years in this case.

Source & comments about analysis: The data for S&P prices and dividend taken from Prof. Shiller’s Yale page; data for housing prices and rent taken from Zillow; monthly mortgage calculation done using www.calculator.net. For simplification, all the dividend was re-invested every month & no fees or taxes included. Due to incomplete data, rent calculation done based on nearby neighborhood with similar rent prices & was extrapolated for first year due to missing data.

Previous charts-of-the-day:

Aug 29, 2017 – US household – time spent in daily chores, 2016

Aug 28, 2017 – US household leisure & sports time, 2016

Aug 27, 2017 – Peak earning vs age, 2010-2016

Aug 26, 2017Price change for TVs, Computer, Internet, Cable & Software, 1996-2015

Aug 25, 2017Number of rental units in Silicon Forest, Tanasbourne, Portland Metro

Aug 24, 2017 – Vacancy rates, for rental & homeowner houses (1980-2015)

Aug 23, 2017Rate of homeownership & number of renters, 1990-2015

Aug 22, 2017 – Comparison of $100k with mortgage vs S&P vs rent, $100k from Jan 2010 to Jun 2017

Aug 21, 2017 – no chart

Aug 20, 2017 – Construction productivity vs other industries (The Economist)

Aug 19, 2017 – no chart

Aug 18, 2017 – no chart

Aug 17, 2017 – Worth of money in parallel worlds (with housing leverage), $100k from Jan 2010 to Jun 2017

Aug 16, 2017 – no chart

Aug 15, 2017 – Worth of money in parallel worlds (long term trend), starting with $100k in Jun 1996

Aug 14, 2017 – Worth of money in parallel worlds, value of $100k invested in Jan 2010 worth in Jun 2017

Aug 13, 2017 – US consumer price index (cost-of-living index or inflation) – (2007-2017)

Aug 12, 2017 – US unemployment rate & wage growth (2010-2017)

Aug 11, 2017 – US home price change by state (1976-2017 & 2016-2017)

Aug 10, 2017 – Inflation plotted with US Treasury & Mortgage rates (2010-2016)

Aug 9, 2017 – US Treasury and Mortgage rates (2010-2016)

Aug 8, 2017 – Household credit score versus time (2001-2016)

Aug 7, 2017 – Monthly mortgage payment across key US metro regions (2012-2016)

Aug 6, 2017 – Good time to buy or good time to sell? Fannie Mae’s monthly Home Purchase Sentiment Index (R)

Aug 5, 2017 – Buy versus Rent – Trulia’s calculator (Apr 2017)

Aug 4, 2017 – Annual change in US home prices across top 20 cities (May 2011- May 2017)

Aug 3, 2017 – Best time to get a deal: time period when best discounts are available in housing market

Aug 2, 2017 – Clark County, Washington state (Portland Metro area, OR) single family home prices (2012-2017)

Aug 1, 2017 – Multnomah County (Portland Metro area, OR) single family home prices (2012-2017)

July 31, 2017 – Washington County (Portland Metro area, OR) single family home prices (2012-2017)

July 28, 2017 – US home prices 1890-present

July 27, 2017 – Median house price for Portland Metro neighborhoods

July 26, 2017 – Average rent for Portland Metro region

July 25, 2017 – Path of total solar eclipse through Oregon

July 24, 2017 – Portland metro area household income by region

 

          

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