While many people view homeownership as a hallmark of financial stability and wealth building, legendary investor Warren Buffett says it includes overlooked costs, which could make buying a house a poor investment.

"Buying a house is usually a lousy investment," said Buffett, who has lived in the same Omaha, Nebraska, home he purchased in 1958 for $31,500 — about $336,164 in today's dollars.

Buffett's home, now worth about $1.4 million, is his only real estate investment. Buffett's estimated net worth is about $136.8 billion.

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First, there's the down payment. During Berkshire Hathaway Inc.'s 2021 annual meeting, Buffett talked about his homebuying experience, noting that the down payment was about 10% of his net worth. He delayed buying a house because he wanted to use the money for other investments, to which his wife consented.

Interest, property taxes and homeowners insurance account for a significant portion of the monthly mortgage payment. Owning a home also ties up funds that could be used to invest in stocks or bonds.

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Buffett also said homeownership does not guarantee significant financial returns compared to other investment strategies, such as stocks.

With escalating home prices and high mortgage interest rates, buying a home has become challenging for many Americans, and many are choosing to rent instead — a smart move, according to financial adviser Dave Ramsey.

According to Ramsey, renting can be a strategic choice that can save people from stretching their finances too thin and will buy them time until they can afford a house.

Ramsey and Buffett aren't alone in their opinions that renting may be a wiser choice than purchasing a home. Grant Cardone, another high-profile social media personality, said rent is often half the cost of a mortgage because of high interest rates, homeowners insurance, and property taxes. 

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