Real estate should be treated as consumption, not investment.
By Jerusalem Demsas, December 20, 2022
[Editor’s Note: I’m not sure on this one; perhaps…]
It is a truth universally acknowledged that an American in possession of a good fortune must be in want of a mortgage. I don’t know if you should buy a house. Nor am I inclined to give you personal financial advice. But I do think you should be wary of the mythos that accompanies the American institution of homeownership, and of a political environment that touts its advantages while ignoring its many drawbacks.
Renting is for the young or financially irresponsible—or so they say. Homeownership is a guarantee against a lost job, against rising rents, against a medical emergency. It is a promise to your children that you can pay for college or a wedding or that you can help them one day join you in the vaunted halls of the ownership society. In America, homeownership is not just owning a dwelling and the land it resides on; it is a piggy bank, where the bottom 50 percent of the country (by wealth distribution) stores most of its wealth. And it is not a natural market phenomenon. It is propped up by numerous government interventions, including the 30-year fixed-rate mortgage. America has put a lot of weight on this one institution’s shoulders. Too much.