Should You "Bank" on Your Home?

We are just about to close on the selling of our home of 19 years and I was wondering what the appreciation was over the past two decades. This was inspired because my realtor keeps reminding me of how much I paid compared to our selling price. The actual cost can get really complicated (considering home improvements, tax benefits, repairs and maintenance, etc.) but I wanted to keep it simple.

I took our purchase price as the present value and our selling price minus realtor fees and updates to the house for selling as our future value. The 19 years of compounding yields a whopping 2.2% return on our house. I know all of you finance people want to look at my investment (down payment) and calculate the return based on that, with tax advantage on interest, also calculating in home repairs and maintenance, but that gets complicated really fast, and I don't have all of those records (shame on me). But this shows that our house appreciated an average of 2.2% over 19 years or about the average inflation over that period.

My grandfather always told me "you buy a house to live in and not as an investment." The house has served us well as a happy home to raise our three children; But as an investment? -Not so much. We are glad that we sold our house. We hope that the buyers enjoy the house as much as we did and they make it into their happy home (but not bank on it as their happy investment ever-after).  


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