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As a general rule, most homes appreciate about four or five percent a year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region and the value and shape of the home.

Five percent may not seem like that much at first. Most stocks appreciate much more than 5% a year, and you could easily earn over the same return with a very safe investment in treasury bills or bonds so why is buying a home a great investment?

Presumably, if you bought a $200,000 house, you did not pay cash for the home. You got a mortgage, too. Suppose you put as much as twenty percent down – that would be an investment of $40,000.

At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $40,000. Your annual "return on investment" would be a huge twenty-five percent.

Of course, you are also making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is almost totally subsidizing your home purchase.

Your rate of return when buying a home is higher than most any other investment you could make. Making buying a new home a sound investment that will give you huge "returns on your investment".