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After the Housing Collapse: The Case Against Homeownership

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"Homeownership has let us down," reads the first sentence in this Time cover story. But how, exactly? Well, this is where things go off the rails.

"For the better part of a century, politics, industry and culture aligned to create a fetish of the idea of buying a house. Homeownership has done plenty of good over the decades; it has provided stability to tens of millions of families and anchored a labor-intensive sector of the economy. Yet by idealizing the act of buying a home, we have ignored the downsides."

All of that is true. But how does that translate into homeownership letting us down? The answer is obvious: It doesn't. Not at all. Homeownership hasn't let us down, we've let the idea of homeownership down. There is nothing inherently good or bad about owning a home. Sometimes it makes sound economic sense. Sometimes it doesn't. Right now, for a large number of us, it simply doesn't make sense to own a home.

The notion that homeownership as a concept has failed us is rooted in a twisted right to entitlement; the sense that we are owed increasing home prices. But why? Why should homes increase in value every year?

"Now, as the U.S. recovers from the biggest housing bust since the Great Depression, it is time to rethink how realistic our expectations of homeownership are — and how much money we want to spend chasing them," the article observes. Below is the most recent cover. And below that? A cover from June 2005. My how the worm has turned.

From 2005:

POSITION:  No positions in stocks mentioned.