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Britney's Piers

The Case Against Homeownership

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Homeownership has let us down. For generations, Americans believed that owning a home was an axiomatic good. Our political leaders hammered home the point. Franklin Roosevelt held that a country of homeowners was "unconquerable." Homeownership could even, in the words of George H.W. Bush's Secretary of Housing and Urban Development (HUD), Jack Kemp, "save babies, save children, save families and save America." A house with a front lawn and a picket fence wasn't just a nice place to live or a risk-free investment; it was a way to transform a nation. No wonder leaders of all political stripes wanted to spend more than $100 billion a year on subsidies and tax breaks to encourage people to buy.

But the dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago. Indeed, easy lending stimulated by the cult of homeownership may have triggered the financial crisis and led directly to its biggest bailout, that of Fannie Mae and Freddie Mac. Housing remains a drag on the economy. Existing-home sales in July dropped 27% from the prior month, exacerbating fears of a double-dip. And all that is just the obvious tale of a housing bubble and what happened when it popped. The real story is deeper and darker still.

Read more: http://www.time.com/time/business/article/0,8599,2013684,00.html#ixzz0yE69laWF

link to article

What does this getting published in a major American magazine signal, a bottom?

Edited by Britney's Piers

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The way people talk and write about housing is often just weird. Using terms like 'the cult of home ownership" makes the think the author has either given the subject little thought, is dense or is hiding a V.I.

There's nothing mystic in people's relationship with housing, it's essential for the purpose of surviving, but for many reasons real estate is also a first rate speculative investment. The combination of these two seems to create a lot of confusion though, which is unfortunate.

Getting the language right would at least assist people in discovering the source of the problem - the monopolistic nature of the land supply -, but for some reason journo's seem intent on doing the exact opposite.

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link to article

What does this getting published in a major American magazine signal, a bottom?

Yes, nice observation. Magazine covers are closely followed by trend-anticipating traders.

The author of this piece seems to be confusing two issues - home ownership and bubble prices. There is nothing inherently wrong with the former, what is wrong is the asset bubble that formed.

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Yes, nice observation. Magazine covers are closely followed by trend-anticipating traders.

The author of this piece seems to be confusing two issues - home ownership and bubble prices. There is nothing inherently wrong with the former, what is wrong is the asset bubble that formed.

Quite, how about changing the article to one about the polluting effect of central bank policy and political short termism on housing and other markets, therein lies the real problem.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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