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The Downside Of Homeownership Part 2

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Sep 12 2007 12:00am EDT

The Downside of Homeownership, Part 2

A short response to Matt Cooper, on the subject of homeownership, since I've basically said my piece at this point.

  1. Matt says that "the social advantages to home ownership seem well documented". I say that a society with high levels of homeownership will be a divided and unequal society. Yes, areas where people own their homes will be more stable and prosperous. But the flipside of that is that the areas where people don't own their homes will be pretty gruesome. Homeownership, on this view, is essentially an inequality perpetuation device.
  2. Matt has "found it hard to come up with a scenario where, over a lifetime, you'd be better off never having owned a home". Er, bankruptcy and foreclosure?
  3. Matt says that house-price appreciation "over a lifetime, seems inevitable even if there are long periods of stagnant or falling home prices". Tell that to people in Detroit or Flint or Baltimore, the value of whose homes have gone nowhere even during the biggest housing bubble in the history of the USA. Now think of the prospects for people who bought during the subprime boom, right at the top of the bubble. They're not pretty.

Matt might be right that buying a home is often a good idea if the chances of losing that house to foreclosure are zero, and if you intend to live in that house for the rest of your life. But those conditions are actually pretty rare.

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