"The correlation between property ownership and virtuous behavior is almost certainly looser than that between property ownership and being located on a well-positioned branch of a prosperous family tree," this is the line that jumped out at me. The association between ownership and virtue is one of the oldest ideas in Anglo-American legal thought, and we teach it every year in property law. It's the connection between property and propriety. This belief, that owners are more responsible, more invested, more virtuous than renters, has always, however, been a possible cover for the real story, which is inheritance. Inheritance is the real throughline between property and propriety. And any virtue there is to be found in property has been inherited.
Thought provoking for sure. There's been a huge fomo aspect over the last 6 years, which followed a decade during which most thought there would more time. More time to purchase at reasonable prices, more time to borrow at low interest rates (somewhat subsidized by central banks), more time. The post financial crisis era was a painful time, there was blood in the streets financially, and it was the opportunity of our lifetimes in residential real estate, for those who had the means. Few recognized it and acted on it, however. It's always difficult to compare residential real estate values across large geographic areas like we have here as well. The period between 2010-2020 really was the time to consider homeownership as a long-term investment, a time when even labor/materials/maintenances costs now look very reasonable. Particularly with the amount of allowable leverage that was available, it's totally true what you say, that the investment opportunity is almost wholly attributable to that aspect of owner-occupied homes, when interest expenses are manageable and fixed. The home-as-an-investment horse has left the barn, in particular for the "affordable homes" market. Interest rates are now more "normal" and labor/material/tax/insurance costs now reflect the massive inflationary spike of the covid and post covid era....and the circumstance of higher shelter costs(owning and renting) is tracking with and exacerbated by that of higher food, transportation, health care, and other costs. I don't know that there's any single solution, but I would say incentivizing the construction of affordable housing inside decaying metropolitan areas would not hurt.
A survey sample size of 2000+ is fantastic and needs no callout. Sample sizes have an asymptote (throwback vocab) which means after a certain point, increases don’t really do anything. And honestly, that number where you hit severely diminished returns is under 1000. Take a look at A+ pollster Ann Selzer’s polls → under 1000 sampled.
A bigger issue is that the survey is “non probabilistic” which means there was likely a commonality among all participants. As an example, if you sampled everyone from residents in Martha’s Vineyard, you could probably say you were hitting age quotas but.. perhaps there were other biases. 😅 We don’t know where they sampled from, so hard to guess what systemic bias could have been introduced. We do know it was an online survey, so any baby boomers that participated already had internet literacy in common. We also know it excluded households that don’t have daily access to internet (approx 10% in my own MSA)
I've always thought of capitalist societies focus on homeownership in the same bucket as marriage, and for future generations who have had to accumulate debt to attain it, a college degree. Saddle everyone with a spouse, a mountain of debt, and their stuck in the machine, on a hamster wheel that never stops moving long enough for anyone to think their lives or the world could look any different than it does.
I wish I had family money to boost me into home-ownership-land...
In many ways I feel like a "failure" for not owning yet (gen X/millenial cusp here), yet my retirement is on track to net me more than I currently net...
I suppose the question comes down to: what's more important for a person and how they live their life, want to live their life, and does home ownership "fit" into that or not?
I suspect that in 15 years we'll look back on this time as "the time to buy" just like how we look back to the 2010-2019/2020 period.
I own my home and am constantly shocked at what people are spending (often more than my mortgage) for a comparably sized or smaller rental monthly, so I'm not sure there is much leftover in my market to put towards other investments.
I mean, if they want a correlate for the subsidies, look to the VA. Our entire down payment was subsidized by the VA and we've been in the same home for 20+ years now.
I can confidently say that homeownership in and of itself did not change our habits haha. It took a lot of scrimping and saving to get to the point where we can keep up with the repairs and upgrades need for a 120 year old home that did it. If we couldn't keep up with those expenses (not usually elective mind; when the chimney falls in on itself and causes a carbon-monoxide issue, you have to take care of it lol) then we would not be able to keep the house.
We took some comfort in the fact that the VA loan also covered us in case we did default. We didn't end up needing that kind of insurance, but knowing there was a backstop helped us keep from panicking.
The following is admittedly simplistic and probably deeply flawed for any number of reasons, but I wonder if the despair induced in some people who get close to the ownership threshold is due to that threshold continuing to increment upward jussssst a bit faster than they can cross it. I suspect some folks can only come “that close” so many times before they say “chuck it”. Likewise, perhaps that moving bar is causing some folks to double down once they do attain that goal, but is motivated more by fear of loss vs. any sort of idealistic or intrinsic motivation? Regardless, another great and thought provoking essay. Thanks!
Ok, so I get the idea that the obsession with home ownership as a psychological cope... but then again, renting long-term in most American cities ends up feels like playing Russian roulette with your lease renewals every twelve months.
Can you explain how, if it’s a better deal to rent, landlords make a profit?
I ask as someone who lives in Cheaphouselandia, where it’s generally no cheaper to rent than to buy. Have my residence paid off and my former residence nearly paid off.
I can't help but wonder, how much of all this is your justification of renting because you believe you can't afford to buy a home (at least a home you'd love and want). Kind of like the pricey SUV that you know doesn't make logical sense but you really want it anyway?
I don't mean it in a bad or judgemental way. It's a solid strategy. But I'm thinking, while home ownership being out of reach drives some people to crypto, prediction markets and nihilism, maybe others instead turn to FIRE and personal finance to feel in control? Different reactions to the same underlying reason?
To be honest, I'm probably not the right person to comment on this. I got a house 9 years ago when interest rates were effectively zero, and the house prices doubled or more since then. So, yeah, I won a lottery and I have no idea what I'd do today.
As we're getting ready to sell our second home and become solely renters again, I think a lot about the entire idea of homeownership as something to be proud of attaining. Then I remember how much money has gone into maintaining that attainment and it makes me upset that so many of our parents are shoving that idea down our throats because they bout 3000 sq ft homes for $96,000 in 1984. The world has changed drastically and the housing idea should change with it.
Great essay. It’s interesting that America’s housing issue is getting so much attention when the systemic issues behind it have started affecting the middle class on a larger scale.
In his book “There is No Place For Us: Working and Homeless in America”, Brian Goldstone likens this to squeezing a party balloon at one end, moving the air to the other side. Extreme urban development, skyrocketing rents, and neighborhood gentrification do not actually eliminate poverty or housing scarcity — they just displace and concentrate it elsewhere in an interconnected economic system, displacing others in turn. Eventually, there is no place for the air to go.
The creative ways the homeless are counted (or not counted) in the US intentionally obscures the rising numbers of the unhoused who are employed and suffering under a system that profits off of their desperation. And the Venn diagram of profiteers and the donor / political class behind policy gutting the social safety net is basically a circle.
"The correlation between property ownership and virtuous behavior is almost certainly looser than that between property ownership and being located on a well-positioned branch of a prosperous family tree," this is the line that jumped out at me. The association between ownership and virtue is one of the oldest ideas in Anglo-American legal thought, and we teach it every year in property law. It's the connection between property and propriety. This belief, that owners are more responsible, more invested, more virtuous than renters, has always, however, been a possible cover for the real story, which is inheritance. Inheritance is the real throughline between property and propriety. And any virtue there is to be found in property has been inherited.
Thought provoking for sure. There's been a huge fomo aspect over the last 6 years, which followed a decade during which most thought there would more time. More time to purchase at reasonable prices, more time to borrow at low interest rates (somewhat subsidized by central banks), more time. The post financial crisis era was a painful time, there was blood in the streets financially, and it was the opportunity of our lifetimes in residential real estate, for those who had the means. Few recognized it and acted on it, however. It's always difficult to compare residential real estate values across large geographic areas like we have here as well. The period between 2010-2020 really was the time to consider homeownership as a long-term investment, a time when even labor/materials/maintenances costs now look very reasonable. Particularly with the amount of allowable leverage that was available, it's totally true what you say, that the investment opportunity is almost wholly attributable to that aspect of owner-occupied homes, when interest expenses are manageable and fixed. The home-as-an-investment horse has left the barn, in particular for the "affordable homes" market. Interest rates are now more "normal" and labor/material/tax/insurance costs now reflect the massive inflationary spike of the covid and post covid era....and the circumstance of higher shelter costs(owning and renting) is tracking with and exacerbated by that of higher food, transportation, health care, and other costs. I don't know that there's any single solution, but I would say incentivizing the construction of affordable housing inside decaying metropolitan areas would not hurt.
A note on footnote 4 from a statistician! 🤓
A survey sample size of 2000+ is fantastic and needs no callout. Sample sizes have an asymptote (throwback vocab) which means after a certain point, increases don’t really do anything. And honestly, that number where you hit severely diminished returns is under 1000. Take a look at A+ pollster Ann Selzer’s polls → under 1000 sampled.
A bigger issue is that the survey is “non probabilistic” which means there was likely a commonality among all participants. As an example, if you sampled everyone from residents in Martha’s Vineyard, you could probably say you were hitting age quotas but.. perhaps there were other biases. 😅 We don’t know where they sampled from, so hard to guess what systemic bias could have been introduced. We do know it was an online survey, so any baby boomers that participated already had internet literacy in common. We also know it excluded households that don’t have daily access to internet (approx 10% in my own MSA)
I've always thought of capitalist societies focus on homeownership in the same bucket as marriage, and for future generations who have had to accumulate debt to attain it, a college degree. Saddle everyone with a spouse, a mountain of debt, and their stuck in the machine, on a hamster wheel that never stops moving long enough for anyone to think their lives or the world could look any different than it does.
I wish I had family money to boost me into home-ownership-land...
In many ways I feel like a "failure" for not owning yet (gen X/millenial cusp here), yet my retirement is on track to net me more than I currently net...
I suppose the question comes down to: what's more important for a person and how they live their life, want to live their life, and does home ownership "fit" into that or not?
I suspect that in 15 years we'll look back on this time as "the time to buy" just like how we look back to the 2010-2019/2020 period.
I own my home and am constantly shocked at what people are spending (often more than my mortgage) for a comparably sized or smaller rental monthly, so I'm not sure there is much leftover in my market to put towards other investments.
I mean, if they want a correlate for the subsidies, look to the VA. Our entire down payment was subsidized by the VA and we've been in the same home for 20+ years now.
I can confidently say that homeownership in and of itself did not change our habits haha. It took a lot of scrimping and saving to get to the point where we can keep up with the repairs and upgrades need for a 120 year old home that did it. If we couldn't keep up with those expenses (not usually elective mind; when the chimney falls in on itself and causes a carbon-monoxide issue, you have to take care of it lol) then we would not be able to keep the house.
We took some comfort in the fact that the VA loan also covered us in case we did default. We didn't end up needing that kind of insurance, but knowing there was a backstop helped us keep from panicking.
The following is admittedly simplistic and probably deeply flawed for any number of reasons, but I wonder if the despair induced in some people who get close to the ownership threshold is due to that threshold continuing to increment upward jussssst a bit faster than they can cross it. I suspect some folks can only come “that close” so many times before they say “chuck it”. Likewise, perhaps that moving bar is causing some folks to double down once they do attain that goal, but is motivated more by fear of loss vs. any sort of idealistic or intrinsic motivation? Regardless, another great and thought provoking essay. Thanks!
Ok, so I get the idea that the obsession with home ownership as a psychological cope... but then again, renting long-term in most American cities ends up feels like playing Russian roulette with your lease renewals every twelve months.
Can you explain how, if it’s a better deal to rent, landlords make a profit?
I ask as someone who lives in Cheaphouselandia, where it’s generally no cheaper to rent than to buy. Have my residence paid off and my former residence nearly paid off.
I can't help but wonder, how much of all this is your justification of renting because you believe you can't afford to buy a home (at least a home you'd love and want). Kind of like the pricey SUV that you know doesn't make logical sense but you really want it anyway?
I don't mean it in a bad or judgemental way. It's a solid strategy. But I'm thinking, while home ownership being out of reach drives some people to crypto, prediction markets and nihilism, maybe others instead turn to FIRE and personal finance to feel in control? Different reactions to the same underlying reason?
To be honest, I'm probably not the right person to comment on this. I got a house 9 years ago when interest rates were effectively zero, and the house prices doubled or more since then. So, yeah, I won a lottery and I have no idea what I'd do today.
As we're getting ready to sell our second home and become solely renters again, I think a lot about the entire idea of homeownership as something to be proud of attaining. Then I remember how much money has gone into maintaining that attainment and it makes me upset that so many of our parents are shoving that idea down our throats because they bout 3000 sq ft homes for $96,000 in 1984. The world has changed drastically and the housing idea should change with it.
Great essay. It’s interesting that America’s housing issue is getting so much attention when the systemic issues behind it have started affecting the middle class on a larger scale.
In his book “There is No Place For Us: Working and Homeless in America”, Brian Goldstone likens this to squeezing a party balloon at one end, moving the air to the other side. Extreme urban development, skyrocketing rents, and neighborhood gentrification do not actually eliminate poverty or housing scarcity — they just displace and concentrate it elsewhere in an interconnected economic system, displacing others in turn. Eventually, there is no place for the air to go.
The creative ways the homeless are counted (or not counted) in the US intentionally obscures the rising numbers of the unhoused who are employed and suffering under a system that profits off of their desperation. And the Venn diagram of profiteers and the donor / political class behind policy gutting the social safety net is basically a circle.