Homeownership is an Investment, not a Moral Good

How can I have forgotten to mention John Leland's piece in the New York Times this morning, when I was responding to Matt Cooper? I blame a lack of coffee. Leland cites the Census Bureau as saying that housing costs are hitting new highs, and then gets this spot-on quotation:

“Maybe it all means that housing is not as smart an investment for as many people as we thought,” said Matt Fellowes, a scholar in metropolitan policy at the Brookings Institution. “Stocks perform better than houses over time. Maybe the American dream should be building wealth in general, not building a certain type of wealth, which we see is narrow and dangerous.”

Clever man, this Fellowes chap.

Seriously, stocks do perform better than housees over time: the only reason that people might make lower returns on stocks than on houses is that their stock-market investments aren't highly leveraged.

And before Matt starts beating me over the head again with the societal benefits of homeownership, let's just stop to consider the societal benefits of stock ownership as well. I'm sure, if you reran the studies, that areas with high levels of stock ownership would turn out to be safer and nicer than areas where people don't own stocks. And I'm sure that if you look at what happens after people buy stocks, they become less likely to go to jail and more likely to stay married, etc etc.

Yes, it's nice to own your own home, although it can be a right pain as well sometimes. But it's not the kind of thing which is ever and always a good idea.