Why high levels of home ownership isn’t necessarily a good thing
- Debt: Some kinds of debt are good and some are bad. Good debt is cheap and predictable. Bad debt is unpredictable for example, an Adjustable Rate Mortgage or a home equity loan taken out to cover current expenses.
- Poor Rental Market: Being able to reliably generate a stream of income from real estate is a good thing. If everybody owns, the rental market sags, which is bad for those who depend on it for income.
- Liquidity: Ownership means tying up a good deal of capital. It’s fine if you get a good return on it, but that depends on a lot of other factors, including timing. And investors have notoriously bad timing. Ownership is not a reliable way to fund your retirement.
- Mobility: People who own homes are less mobile. If you can’t move relatively quickly, you can’t exploit changes in the labor market. You’re stuck. Being stuck is not a good place to be.
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