Rethinking America's Home Ownership Cult

For decades, the government has done a lot of different things to encourage home ownership. It intervened so drastically into the market that we got this housing crash.

Sometimes it is good to own your home. Sometimes it is good to rent.

About 15,000,000 Americans own homes that are worth less than their remaining mortgage payments. They are under-water.

Author Eric S. Belsky writes in the Los Angeles Times:

Even in the middle of this collapse, when people were asked about their expectations for house price appreciation over the next year, the answers shock. Zillow.com reports that at the end of 2008, with prices falling, 70% of those surveyed said they did not think their house price would decline over the next six months, and more than a quarter expected it to actually increase.

Many people also still rely on outdated measures in deciding whether to buy or rent. For example, they often base the decision to own on how long they will be in a home. But people predictably understate the chance that they will be forced to move because of a job loss, divorce, death of a spouse or disability. Furthermore, the focus of efforts under the federal national stabilization program to deal with foreclosures is to recycle them back into the hands of homeowners or, in the case of small, multi-unit apartment buildings, resident landlord/owners.