Is home ownership not for everyone? As the subprime market continues its unraveling, that’s the conclusion some are drawing. We wouldn’t encourage people to buy risky stocks, so why do we encourage low-income families to invest in this risky asset, especially in tight markets? asks Stuart S. Rosenthal, an econ prof at Syracuse University. Clearly we went too far, said Joseph E. Gyourko, a professor of real estate and finance at the Wharton School of the University of Pennsylvania. It’s not the case that high homeownership is always good. Of course, the idea of home ownership is about as American as apple pie, with even such lefties as FDR pronouncing that A nation of homeowners is unconquerable. So while much of the blame for the growing crisis among lower-income homeowners can be placed on the lax standards of mortgage companies, critics are increasingly pointing a finger at government policy that is, many say, too biased towards home ownership. In addition to getting poorer people in over their heads, the unintended consequences include encouraging better-off people to buy bigger houses than they need and even restricting mobility of the workforce. Do you think the government should adopt a housing-neutral policy?
Mortgage Trouble Clouds Homeownership Dream [NY Times]