The Dream of Home Ownership--Or Is It The Nightmare?
Interesting new survey popped into the email box today, and let me just preface by saying, YES I NOTICED that the survey was commissioned by the National Apartment Association.
That said, prefaced, noted, disclaimed, the survey of more than 2,100 U.S. homeowners surveyed by Harris Interactive, finds that 65% believe, given the current state of the real estate market, there are advantages to renting as opposed to owing. This is in contrast to previous reports that show most people see renting as a stepping stone to home ownership.
This survey found people were actually more concerned with lack of privacy in rental apartments than they were with lack of equity. The top advantages to renting: no susceptibility to foreclosure, not being impacted by unpredictable real estate resale market, and no fluctuating interest rates.
So I’m supposed to believe that a majority of Americans no longer thing a home is a valuable investment? Come on. I realize we’re in the midst of a major housing correction, and prices are falling from their heady highs of a few years ago, but let’s just take a pill here, shall we?
Average home price appreciation historically is 6%. In the good times, it can be a good deal better, and in the bad times you may lose a bit if you have to sell, but who sells a home every year? Or even every two years?
Just because a new breed of investor-speculator-flipper types pumped up the condo market during the recent boom doesn’t mean that the bulk of Americans are calling United Van Lines every 18 months. The bulk of us stay in our homes for more than five years at a time, long enough for any cyclical aberrations to, well, run their cycle.
A home is also, unlike a stock, something that gives returns not just on a fiscal basis, but on a physical basis. You live there! It shelters you. A rental does the same but does not afford you the ability to give it your own personal touch or to have total control over your surroundings. A rental does not allow you the ability to add on to the home and increase its value exponentially.
Ok, you got me; I think home ownership is a good thing, personally and for the greater economy. Trust me, I’ve lived in rental land, from teeny cardboard apartments to a big cardboard box of a house in the suburbs of Dallas. It’s definitely the right thing for some people, especially young people who are more on the move, but from an investment perspective, burst bubble or not, I still say a house is the best financial foundation to build on.
Questions? Comments? RealtyCheck@cnbc.com