Home Ownership is a Privilege, Not a Right

Many years ago it was determined that the goal that most Americans should have is home ownership.  This message was loud and clear after WWII.  And for year after year, that message was delivered to the American people by the government, lending institutions and REALTORS.  And for many years the rate of homeownership in America held steady between 63% and 66%.  In fact, for 33 years, between 1965 and 1997, that was where the rate of home ownership stayed. (Chart courtesy of Calculated Risk)

But in the late 1990's, something changed and home ownership went on a tear that took it to higher and higher levels every year for the next 8 years.  And during this eight year bull market, the ability to buy a house became easier and easier as everyone pushed the message of living the American Dream of Home Ownership. 

And now we are experiencing the hangover of this home ownership soiree.  Record foreclosures, mortgage meltdowns, bankrupt lending institutions, bankrupt banks, etc.

And the message should be perfectly clear.  Home ownership is not for everyone.  In fact, home ownership over a certain percentage (66%) is unhealthy.  And the new message we should be sending to the American people is that home ownership should be regarded as a priviledge, not a right. 

If you cannot save money for a down payment or closing costs, perhaps you should rent.  If you can't pay your other bills, maybe you shouldn't get a mortgage.  If you can't hold a job for more than a couple months, maybe renting is a better option for you.  This should be the new message sent to the American people by the associations representing lenders and REALTORS, not this, or this.