Why do home prices increase over time?

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To be clear, I understand what inflation is, but something that’s only keeping up with inflation doesn’t make sense to me as an *investment.* I can understand increasing value by actively doing something, like fixing the roof or adding an addition, but not by it just sitting there.

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Anonymous 0 Comments

They don’t always. Only in metro areas that experience population growth faster than what construction can keep up with.

In metro areas that are seeing population declines, you’ll see home prices go down. And in metros where construction keeps up with population growth like Houston or Tokyo, home prices tend to stay flat.

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