Two weeks ago I was lecturing two of my coworkers about homeownership. I explained to them that there was insufficient reason for me to purchase a home in the current market, and if need be – I would rent indefinitely. I added that I felt a lot of American’s have been misled into believing that the American Dream is owning a home. I believe the American Dream is freedom and economic prosperity, and for many American’s, home ownership prevents economic prosperity. My reasoning is simple. Many homeowners simply buy too much house and end up being house-poor. Others bought homes in an overvalued market and are now upside in their homes (negative equity.) Owning a home also makes people less mobile, in turn makes it tougher for them to relocate to accept better work. Top that off we the fact that most people own homes outside of the city or in suburbs which requires longer commutes and ever-increasing gas bills. For me, weighing these negatives (and an overvalued market) against the perks of homeownership makes renting a no-brainer for me.
So imagine my surprise when I stumbled across a Paul Krugman article in today’s NY Times that confirmed most of my argument.