Suddenly, the American Dream of homeownership is under assault. Some are claiming that homeownership is a poor investment. Others argue that mortgages are a bad idea.
Renters like Josh Barro, writing in the New York Times, are dissing the American Dream of homeownership, comparing it to buying food. Over at The Week, John Aziz penned an article titled “A mortgage is a terrible investment.” Aziz’s colleague, Ryan Cooper, came to the same conclusion, calling for the end housing subsidies in an article with the headline “It’s time to kill the American Dream of homeownership.”
“The United States has become a starkly unequal plutocracy whose class structure is far more calcified than social democracies in Europe,” writes Cooper. “Still, even though the fact of inequality has become widely accepted, the aspirational creed of homeownership remains woven with the idea of America itself, both in terms of policy and culture. And that needs to end, as soon as possible.”
“The problem is that a house is a crap investment,” concludes Cooper, a former New Republic writer. “It’s time to let that malignant symbol of the American Dream die a quick, quiet death.”
Wow, these guys are angry at homeowners.
In another article attacking housing policy — titled “Toward a fairer, saner housing policy” — Cooper argues for “fairer” housing policy, claiming that the current “housing system” favors the wealthy.
But not everyone wants to be a renter.
The American Dream of homeownership is still alive and well today in the United States, according to Peter Francese, the founder of American Demographics Magazine. The American Dream of homeownership, Francese argues, is not dead. He is convinced that there is not a fundamental shift away from homeownership towards renting.
“We are not becoming a nation of renters,” said Francese, dismissing the idea that America is turning into a society of renters. “The past six years have been the worst years for real estate since the Great Depression. The recession is slowly coming to an end and homeownership is creeping up. It’s going to take a while, but it will rise back to 67 percent. I feel very positive about homeownership. The American Dream is to buy a house and send your kids to college.
Francese predicts three substantial trends for housing in the coming decade. First, at 86 million strong,
Millennials — sometimes called generation Y and defined by many demographers as ranging in age from 18 to 29 — will leave their parents’ home, settle down, buy a house and start producing children and possibly revive the stagnant housing market. Second, he believes large numbers of Baby Boomers will either downsize to a smaller home or buy a smaller second flat, stimulating the ailing housing market. Third, Francese forecasts double-digit growth for senior housing as Baby Boomers age.
At the same time, Francese said, a lot of the increase in homeownership in the future will not take place in suburbia, but where Millennials are headed.
“This is a huge difference from previous decades,” he said, predicting a migration from suburbia to urban centers largely driven by Millennials and active Boomers. “Cities are gentrifying. Many cities are revitalizing and changing. Millennials are 50 percent Hispanic, African American or Asians. They actually prefer cities. We are looking at a new phenomenon. Homeownership growth will occur in urban areas.”
Makes sense to me.
What do you think? Is the American Dream of homeownership alive or dead?