Homeownership Is Not The American Dream

For some of us, homeownership is still the right move if the job and the living situation are stable. But in many scenarios, Jim Dahle at The White Coat Investor argues that homeownership is not the American Dream anymore. Many homeowners would be better off by renting instead owning, especially for people that expect to move within 5 years, loose jobs, or get divorced. Also, the argument for buying a house with a mortgage as a form of forced savings is weak. A lot of homeowners get foreclosed or take out home equity to spend on upgrading their lifestyles. Furthermore, the cost of owning does not go down over time due to the opportunity cost and the rise in taxes, insurance and maintenance. Dahle said: “The message is pretty clear- if you just owned your home you’d be rich and be spending way less of your income on housing. Of course, correlation is not causation. In reality, homeowners have more money and spend less of it on housing because they make and save more money, not because they own a home.”