That's true, but most places you need to spend fairly close to the full mortgage cost not to get a better return if you're able to put even a small proportion of the cost increase in an index fund. It's worth taking into account, but if you do, you should also take into account whether the other option will leave you money left over and if so how you'll spend or invest that.
> Across the country's 35 largest metro areas, homes that boast of a formal dining room ask a median of $325 500, 23% more than the national median home price[0]
I didn't find specifically the median house price, but reversing the 23% increase puts the median at $265 000.
This suggests a median 'dollar value difference' from adding a dining room of around $60 000.
With a median down payment of 13%[1], and an average interest rate of around 7%[2], you'll pay back around $550 000 over a thirty year mortgage[3].
In order to pay back less than $610 000 (i.e. the $60 000 value difference), the mortgage shouldn't exceed $293 000, leaving you with only $28 000 to build your dining room and come off better off at the end of the mortgage term.
Obviously if you can do better than the median rates, down payments, and values, then the maths changes, but on average, it looks like I might be wrong about you recouping the full amount you spend on adding a dining room.
