Warren's reasoning comes from a unique idea he has of "short-selling" your dollar with real estate investments. With the value of the dollar depreciating 79% since 1990 (if you had a dollar in 1990, to buy the same stuff today, you need $1.79). What does he mean when he says to short sell your dollar by investing in real estate?
Here's why a real estate investment protects your dollar so well: Sure, values have dropped over the past 3 years, on average (nationally) by 42%, but they haven't dropped 79%! That's a 37% return on your dollar IF it was invested in real estate in arguably the worst real estate market we have seen since the great depression. He has a good point.
With home values low, best mortgage rates in history, and the home affordability index the best since 1943, what better time to purchase a home than right now??
Want to save more money by buying now rather than after April 1, 2012? Warren Buffett didn't even talk about another factor of investment savings to take advantage of in the month of March (possibly because he doesn't need an FHA loan? lol). FHA mortgage insurance is increasing to 1.75% up front (currently 1%) and 1.25 monthly (currently 1.15%) on April 1st, 2012. I calculated the increase in payment on a $170,000 sales price home would be $22/month ($264/year, $3168 over 30 years). Buy now and protect yourself from this increase. :)
