How can I have forgotten to mention John
Leland’s piece in the New York Times this morning, when I was responding
to Matt Cooper? I blame a lack of coffee. Leland cites the Census Bureau as
saying that housing costs are hitting new highs, and then gets this spot-on
quotation:
“Maybe it all means that housing is not as smart an investment for
as many people as we thought,” said Matt Fellowes, a scholar in metropolitan
policy at the Brookings Institution. “Stocks perform better than houses
over time. Maybe the American dream should be building wealth in general,
not building a certain type of wealth, which we see is narrow and dangerous.”
Clever man, this Fellowes chap.
Seriously, stocks do perform better than housees over time: the only
reason that people might make lower returns on stocks than on houses is that
their stock-market investments aren’t highly leveraged.
And before Matt starts beating me over the head again with the societal benefits
of homeownership, let’s just stop to consider the societal benefits of stock
ownership as well. I’m sure, if you reran the studies, that areas with high
levels of stock ownership would turn out to be safer and nicer than areas where
people don’t own stocks. And I’m sure that if you look at what happens after
people buy stocks, they become less likely to go to jail and more likely to
stay married, etc etc.
Yes, it’s nice to own your own home, although it can be a right pain as well
sometimes. But it’s not the kind of thing which is ever and always a good idea.