You buy a house for $300,000, with transaction costs making up $0.6% of the purchase...
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You buy a house for $300,000, with transaction costs making up $0.6% of the purchase price. After 8 years, you sell the house, paying the broker's commission of 3%.
Owning the house saves you $3,000 per year, the cost of renting an equivalent house. Your cost of capital is 7%.
At what rate of annual home price appreciation do you break even, i.e., obtain an NPV of zero?
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