The answer to the question is "it depends". It depends on a lot of things. In which market at what time? Do you have a mortgage? Will your house appreciate faster than your mortgage rate? How much would you have spent on rent elsewhere? What other opportunities do you miss?
How much SATISFACTION do you get? If I were willing to rent a smaller place and invest the money in my home elsewhere I would probably end up with greater monetary wealth in the long-run but would lose a lot of satisfaction. The cost of satisfaction with my life is not worth that.
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