Reply to What %age of your net worth is your primary residence?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]For those of us with smaller and less expensive homes, is there value in including the equity in our net worth? I understand the logic when we're talking about a house that has appreciated and can be sold to net a profit and downsize. In my case, that's not an option unless we move to a LCOL area, which is not planned. So the value of the house doesn't have a lot of meaning in my financial planning because we need a place to live. Thoughts?

House is about 20 percent of NW. [/quote]

This is the way I think about it. A house is a place to live. Hopefully by retirement it is paid for so it is no longer a liability. The equity within it is really useless unless you sell it or borrow against it (at an interest rate). Many Americans in general and people on this forum are obsessed with housing values, viewing houses as an investment, appreciation, etc.[/quote]

I think the point was it matters how much the house is worth.  A $2 million dollar house with $1.5 million in equity means more in terms of financial planning because it's easy to find housing at a fraction of that housing/equity amount.  It's thus reasonable to consider that equity when planning for retirment.  It's much less reasonable when the home value is $300k and the mortgage balance is $200k since it's not easy to find a lot of places to live utilizing that amount of money.[/quote]

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