WSJ: Changing Perspectives About Homeownership

by Mark Wellborn


On its Developments housing blog yesterday, The Wall Street Journal wrote about a National Foundation for Credit Counseling survey, which shows that many in the country no longer think that homeownership is a way to build wealth.

The survey, which included just over 1,000 adults, found that one-third do not think that they will ever be able to afford a new home, and a number believe that they will keep renting for the foreseeable future.

From the blog:

Consider it a by-product of the housing crisis, as millions of Americans face plunging home values leaving many stuck with a house worth less than the mortgage. This is only adding to the number of foreclosures and short-sales, eroding prices further and slowing recovery. Would-be buyers are sticking with landlords, while many who lose their residence return to writing rent checks.

This article originally published at http://dc.urbanturf.com/articles/blog/wsj_changing_perspectives_about_homeownership/1064


  1. Tim said at 11:10 am on Wednesday June 24, 2009:

    If the hosuing market is not appreciating in price, ownership makes little sense. The savings from renting versus a mortgage willl typically exceed the mortgage tax savings - even at the highest tax brackets. Add in transaction costs, maintainence costs, property taxes, disparity between renters and homeowner’s insurance, there is little favoring home ownership. Plus, the investment is illiquid.

    Homeownership’s investment value is all about the leverage provided by the mortgage. But if market prices are decliing or steady, you are leveraging nothing.

    Of course, this analysis assumes that the money savings from renting are put to effective use elsewhere. A mortgage is a form of forced savings, if nothing else.

  1. ellen said at 4:03 pm on Wednesday June 24, 2009:

    Assuming you purchase wisely and buy an “undervalued” property that you intend to live in buying is still the way to go. Your mortgage interest and real estate taxes are deductible too.Real estate values especially in DC & NY always come back.Buy,live in it and enjoy! Invest,rent it out enjoy!

  1. Joe said at 6:33 pm on Wednesday June 24, 2009:

    Assuming you purchase wisely and buy an “undervalued” property that you intend to live in buying is still the way to go. Your mortgage interest and real estate taxes are deductible too.Real estate values especially in DC & NY always come back.Buy,live in it and enjoy! Invest,rent it out enjoy!

    Can we safely assume you work in the home sales industry?  ‘Cause you’re hitting their talking points..

  1. aj said at 10:40 am on Thursday June 25, 2009:

    I just bought a place and I think there is tremendous value in being able to do whatever I want to it and NEVER AGAIN having to deal with effing landlords (pardon my language).

  1. CondoAuthority.com said at 2:45 pm on Thursday June 25, 2009:

    If everyone rents the only way new housing will be built is if it makes sense for builders/investors to build.  If the population continues to gradually increase then there will be continued increased demand for roofs over our heads, but if no one is buying then the only way new housing will be built is if the owner can make money renting.  Eventually the market should then come back to equilibrium and it may in fact cost more to rent than it would to own.  And, there’s definitely a value to not having a landlord and not worrying about rent increasing.  In the late 90s rents in apartment buildings in Northern VA was going up 10%+ per year (and they never really came down) so the price changes aren’t limited to for sale housing.

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