> Home equity is the main financial element that middle class families use to build wealth, and black rock, a federal reserve funded financial institution is buying up all the houses to make sure that young families can’t build wealth.
Faulty logic. First, though historically people have used home equity to build wealth, that hasn't been the best method of building wealth. Most of those people would have been better off continuing to rent and investing in the stock market instead.
Second, building wealth through alternatives to home ownership may be better for a large portion of the population that finds the very fact of their residence decreases the value of a home relative to other homes.
But the only reason you'd want 5-to-1 leverage on a house would be to have a hope of keeping up with stocks. Also, it'd be 4:1, right, if you're doing 20% down?
Home values are believed to be less risky. Accordingly, they appreciate more slowly. To make them a good investment, you take leverage until they approximate the risk/return ratio you desire.
Remember, there are huge buyers like BlackRock out there that make the market efficient. If home prices drop to the extent that investing in a house is better than the stock market, then the investors swoop in and the prices go up until the two asset types are equivalent (including the fact that one generally borrows to buy a house).
Faulty logic. First, though historically people have used home equity to build wealth, that hasn't been the best method of building wealth. Most of those people would have been better off continuing to rent and investing in the stock market instead.
Second, building wealth through alternatives to home ownership may be better for a large portion of the population that finds the very fact of their residence decreases the value of a home relative to other homes.