Editorial The New York Times December 12, 2014
Homeownership has gotten a bad rap, said The New York Times. Â ” Since the housing bust, renting has been in and owning a home has been out, especially among young adults who in earlier decades would have been first-time buyers.” Â Today just 64.3 percent of Americans own homes – a 20-year low! Â That’s a shame since homeownership long has been central to Americans’ ability to build wealth.
In 2013, the median net worth for homeowners was $195,400 compared with just $5,400 for renters. Â Buying a home simply forces people to save – for both the initial down payment and monthly mortgage payments. Â And while the housing bust proved how risky homeownership can be, the lesson of that debacle is not for individuals to avoid homeownership or for policymakers to devalue its importance.
A wiser path is to foster conditions that allow more middle and lower-income Americans to climb onto the housing ladder, including smarter regulations governing lenders, better consumer protections, and more robust wage growth. Â Renting can make sense as a lifestyle choice or because of income constraints. Â As a means to building wealth, however, there is no practical substitute for homeownership!
