There's Only One Reason to Own a Home Today
Studies suggest the only real reason for owning a home is pride of ownership. Renting is a better option for economic growth for anyone who can save.
After all, renting is a better option for economic growth for anyone who can save. Nor is home ownership in a city something we as a nation have done since our country came about.
Before rushing out to get a good buy on one of the foreclosures that is available, take time to figure out where we as a country are going and what that means for you for home ownership.
We are currently in a deep recession that the economists are loathe to call a depression. Just what is a depression? I'll forego the joke distinguishing a recession from a depression, although it is just as good a definition as any. Looking for a definition of a depression will yield a large number of differing definitions. There doesn't seem to be one definition of a depression. However, we have had one period that later was called a depression. Interestingly, the term depression was not used to describe an economic downturn until "the great depression."
In the 1870s, we had what has come to be known as the long recession. Then there was the Great Depression. These two resulted in changes in our country.
After the 1870s, we went from mainly farming to industrial. This required a change in home ownership from houses on farms to housing in the industrialized areas. After the 1930s (and World War II), we went from city centered to the suburban sprawl that describes what we currently live in. What changes will come from this current economic downturn?
We don't know whether we are in a recession or depression. The economic downturn is getting pretty long in the tooth (as the expression goes). As the downturn continues, it will become clearer which this is. However, getting back to the original question, there is no rush to get into a house if you are not buying one now. If this does become a more severe recession, can we expect another change?
It seems to me that we are changing. We seemed to be moving to where we want our jobs closer to where we live. Also, we seem to have gone from having one job for life to having multiple jobs over a lifetime. Clearly, we are going to make major changes.
How one lives will be defined by where we live. That "deal" of a foreclosure may turn out to be completely alien to what your life style becomes. Do not rush to get in on one of those good deals.
Another thought on home ownership is being "underwater." If you own a home that you bought with the idea of living in it and working in the same city or town where you currently live, what do you care if you are "underwater?" You intend to pay off your mortgage and enjoy your home.
Don't let the news media panic you simply because you are underwater. If you are comfortable making your payments, pretend the diminishing value of real estate has no real impact on you. You've probably suffered through the majority of the loss by now.