So What?
Via Glen Reynolds, from Keith Jurow at Business Insider
There is a far-reaching change occurring now which threatens housing markets around the country. A survey conducted by Harris Interactive for the National Apartment Association in May 2010 found that 76% of those surveyed now believe that renting is a better option than buying in the current real estate market, up from 71% in 2008. Especially sobering was the fact that 78% of those surveyed were homeowners.
David Neithercut, CEO of Equity Residential, the nation's largest multi-family landlord, believes that there is a "psychology change" in the mind of consumers. In a June address to an industry conference, he declared that there is "a change in one's thought process about the benefits or wisdom of owning a single-family home."
When an author uses the word "threatens" to describe a trend, you know he doesn't like it. While a home may be a good place to put excess cash for some people, as a leveraged investment it is insane. It is a dead asset, producing no cash flow or future value. While the land under it may be a scarce asset, particularly in some areas with strict growth limits and zoning laws, the house itself is a depreciating asset as much as your car is (trust me, I just replaced an air conditioner and spent weeks repairing dry wall cracks).
Renting pays a lot of benefits, not the least of which is the mobility it adds to the labor market. Individuals with leases are less tied to a certain spot, so have more flexibility to leave a given area to seek better opportunities elsewhere (this actually triggers a thought I had not had before -- I wonder if government promotion of home ownership, particularly at the state and local level -- can be seen as a modern form of serfdom, with politicians attempting to tie people to the land so they cannot move and take their tax money elsewhere).
So home ownership is a fine option for many (I own a home and prefer that status in my present circumstances) but there is no law that says it has to be the norm or the default. Many people have switched from whole life to term, from buying individual stocks to mutual funds, from defined benefit pensions to 401k's. The way we achieve goals evolve over time, and there should be nothing surprising about a change in how people wish to access housing. And certainly nothing in this trend which should occasion government intervention to prevent.
