Paul Krugman on Home Ownership

mre blandings dream house photo
Mr. Blandings Builds His Dream House

When we asked the question Is Home Ownership a Good Thing? the consensus among the commenters was that indeed, it is. When we questioned the logic of mortgage interest deductibility they weren't impressed either. Now economist and New York Times writer Paul Krugman weighs in on the subject, asking

Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

Listening to politicians, you’d think that every family should own its home — in fact, that you’re not a real American unless you’re a homeowner. “If you own something,” Mr. Bush once declared, “you have a vital stake in the future of our country.” Presumably, then, citizens who live in rented housing, and therefore lack that “vital stake,” can’t be properly patriotic. Bring back property qualifications for voting!

The Problems with Home Ownership

-Financial risk. "Although it’s rarely put this way, borrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake."

-Tying workers down in one place.

-The cost of commuting. "Buying a home usually though not always means buying a single-family house in the suburbs, often a long way out, where land is cheap. In an age of $4 gas and concerns about climate change, that’s an increasingly problematic choice."::New York Times

On Home Ownership
Is Home Ownership a Good Thing?
Dingell wants cap on Mortgage Interest Deduction
Owning Your Own House Outright