Warren Buffett Once Said Americans Should Be 'Lining Up' To Buy Homes, Calling The 30-Year Mortgage A 'No-Brainer' And A Good Way To Go Short the Dollar
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Warren Buffett is known for stocks, not house-flipping. He still lives in the Omaha home he bought in 1958 for $31,500 and has kept his real-estate footprint small compared with other billionaires.
That frugal streak is part of the point here: he's never told people to avoid owning a home—he's argued that the 30-year fixed mortgage can be a powerful tool when used wisely.
Back in October 2014, onstage at a Fortune conference, Buffett said: "You would think that people would be lining up now to get mortgages to buy a home... It's a good way to go short the dollar, short interest rates. It is a no-brainer." The "lining up" and "no-brainer" language is his, and the "short the dollar" framing is exactly how he put it.
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Buffett's logic is straightforward: with a 30-year fixed, borrowers repay in future dollars that may be worth less—that's the "short the dollar" idea. If rates fall, refinancing is optional; if rates rise, the contract protects the homeowner. In 2014, that take resonated because mortgage rates hovered roughly in the low-to-mid 4% range, and even dipped into the 3.8% area by year-end, while home prices were steadily recovering from the 2008 housing crash.
Case-Shiller data show U.S. home prices had rebounded by 2014 and were rising at mid-single-digit annual rates—solid, if slower than the snapback just after the bust. That period reminded buyers why housing can hedge inflation over long horizons: since 1987, nominal U.S. home prices are up about 410%, while inflation-adjusted gains are roughly 77%—not a rocket ship, but a durable store of value.
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Fast-forward to this past may May when Buffett was asked at Berkshire Hathaway's annual meeting in Omaha why he isn't buying more property. His answer targeted real-estate investing, not homeownership: "In respect to real estate, it's so much harder than stocks in terms of negotiation of deals, time spent, and the involvement of multiple parties in the ownership... Usually when real estate gets in trouble, you find out you're dealing with more than just the equity holder." He added that there's "so much more opportunity... in the security market than in real estate."
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