Home Prices Are Up More Than the S&P 500: How Real Estate Investors Can Take Advantage

About the only asset that is performing well this year is residential real estate. Stocks have entered bear market territory, bonds have had a terrible year, and crypto is suffering as well. The only asset that has been safe as houses has been, well, houses. While the S&P 500 is down for the year, home prices have been appreciating in the mid-to-high double digits, depending on the housing index used. How can investors get involved in residential real estate?

The most obvious way is to buy property. While the number of homes for sale has been limited by a lack of homebuilding over the past decade, there are still properties out there. While mortgage rates are up tremendously over the past six months, if you look at the longer term, rates are still quite low. In the early 1980s, borrowers could expect to pay 15% or more on a mortgage. If you are a renter looking to buy a starter home, remember that real estate is one of the few assets you can actually use. You get a growing asset and a place to live.

Another interesting option is "house hacking," where an investor uses a Federal Housing Administration (FHA) loan to buy a two- to four-unit property and lives in one unit while renting out the others. FHA loans allow the borrower to put down as little as 3%.

Source Fool.com