> A house is an inflation hedge.

So are Stocks ...

> I find it hard to believe that over time if you took the money you'd put into a house and subtracted out rent, you'd end up winning in the long term.

You are not alone. The thing is this is such a common argument that there are a zillion rent vs buy calculators [1].

That said, yeah sub 3% the math often does work out in terms of buy (assuming you don't sell before 7 years which the average person _does_ sell before). But sub3% and holding for 30 years is actually rare.

It basically comes down to that the down payment gives renters such a headstart in gains that the homeowner takes forever to overcome it. But keep in mind they're also comparing a similar rental house to the bought house. So If you'd rent a smaller 1 bedroom apartment but only going to buy a 4 bedroom house then you're really behind in the math.

[1]: https://www.google.com/search?q=rent+vs+buy+calculator

The problem I have with buy vs rent calculators is that the speculative questions often end up dominating the decision. How much will rent go up in the place you rent? Nobody knows. How much will the value of the property appreciate during the period you own it. Again, this is unknowable. So you put in a range of guesses for these, and you can get it to come out as a good or bad investment depending on what you guess.

My guesses were ludicrously wrong when I did these back in 2018, relative to what has actually happened in both the rental market where I live, and the value of the house I bought. I concluded that the reason to buy was only about the non-financial aspect, and that we'd probably lose a little money all told. But it has turned out to be a six figure win in practice. Rent has gone way up, we were able to refinance to one of these very cheap loans during covid, and the property value spiked around the same time. I never would have guessed any of that. And any of it could have gone the opposite way.

So the calculators were honestly pretty useless. It's all too unknowable.