The New American Dream Has Nothing To Do With Buying A Home

[FarCenter]

Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home.

The effective homeownership rate, which excludes borrowers whose homes are underwater, stands at 62 percent, down from 69 percent in 2006, according to a 2010 report by the New York Federal Reserve.

As more people move from owning to renting, apartment vacancy rates have fallen fast, from 8 percent in 2009 to 5.6 percent in third quarter 2011. That’s pushed up rents in all markets by 2.5 percent, including apartments and single-family homes, to an average of $846 nationwide, according to Local Market Monitor, a home price forecaster. For a two-bedroom dwelling, the average rent was at $1,020 in June 2011.

...


She may be onto something: many experts now challenge the conventional wisdom that owning is a necessarily a sound life choice. Forbes contributor James Altucher argues that buying a home is a trap—houses are illiquid investments that drain their owners’ time, energy, and cash and force them to stay put. Another skeptic is Yale economist Robert Shiller, co-creator of the Case-Shiller Home Price Index. He compiled data in 2006 showing that between 1890 and 2004, the return on investing in houses was just 0.4 percent a year—a period when the stock market grew at 9.6 percent annually. And in a paper this June in the journal Real Estate Economics, two researchers calculated that over the past 30 years, most often it would have been better to rent than buy. Renters who invested in stocks and bonds instead of home equity came out ahead 75 percent of the time.


http://www.businessinsider.com/the-new-american-dream-has-nothing-to-do-with-buying-a-home-2012-1

[nashville_brook]

1. so, who is making 9.6 percent in the stock market?

my family was wiped out in the last crash. at least they had a house to live in and later sell.

[TwilightGardener]

2. LOL, listen to the Forbes asshole try to convince me that owning my own home

is draining away my time! My ENERGY! Less money for big screen teevees and less time for "Jersey Shore" (or whatever it is the rabble like to do)! It's "illiquid", I'll never be able to sell it, I'll be stuck with this behemoth forevah, or until the bank takes it from me! Sorry, chump--maybe it's that way for some folks, but I plan on taking full ownership of this little building on this little piece of ground in about 20 years, you can suck it.

[Romulox]

3. It's worth point out that the ROI on apartments is zero point zero percent. nt

[klook]

4. So when you're old and barely scraping by

on a fixed income, and the landlord raises the rent another $300, be sure to congratulate yourself on your wise decision to avoid the TRAP of home ownership!

[FLSurfer]

5. "Renters who invested in stocks and bonds instead of home equity....."

I don\'t really get this last line. If I don\'t make a mortgage payment, I\'ll invest in rent.
Where does the money to invest in stocks and/or bonds come from?
Saving from difference in rent and martgage payments?
In my case that would be a negative balance, as my mortgage is cheap in comparison to local rents.

[Javaman]

6. Actually, the evolving "american dream"...

most of the time, it's based on the various financial needs of the nation and how best the people can fill that need by buying products

The current brand of propaganda being forced upon us is still the same old song of the post WWII era.

In this case, the US economy has a lot to win if the housing industry does well. So therefore, promote the home ownership thing as part of the American Dream.

Owning a new car is part of the American Dream.

Notice if you will, anytime the idea of the American Dream is trotted out, it's always attached to some sort of product or consumerism.

Prior to WWII, the concept of the American Dream was vastly differenet. It was more a philosphical concept of freedom of speach, freedom to live ones life, etc.

The idea and concept of what the American Dream is and will become is really all about whose in charge and very far from what the people of this nation actually want.