There's going to be a long-lasting psychological hesitancy for ordinary buyers to believe again in the dream of building wealth through homeownership."
I'll say this one final time and then, I promise, I'll shut up.
The idea of "...building wealth through homeownership." is relatively new; thirty years ago my Ph.D. Prof in Davis owned 14 houses, 12 of which he rented, but that was not the buy and flip days. What I tell my students is, once you have a stable job (best bet ... work for the Fed. Govt.) stop flushing money down the toilet in the form of rent cheques and get a place you can own/afford.
That's it. Sorry to bother you. In the end, might makes right. Nothing has changed since the caveman.
Ten years ago, when the housing prices were much lower than they are now (and the rents comparatively higher), you certainly could make the case. Nowadays, you'd better take a cold hard look at the numbers before deciding whether this is the best use of your money.
Your mileage may vary of course, depending on the local situation in your country/region, house price trends, rental costs, renters protection (or the lack thereof)...
That's where the rub is: home ownership as a social status more than a rational financial decision is so ingrained in our social consciousness that we don't even pause for a thought, so convinced we are that "renting is throwing money down the drain". That's the cornerstone of the pwn3rship society touted by W and his European ilks. Europeans think a hundred miles is a long way. Americans think a hundred years is a long time.
If you stay in your house 10, 20 years or more, buying it is certainly the best plan (unless exceptional circumstances such as Detroit or Baltimore). Less than 10 years? Better do the numbers before: closing costs, property taxes, maintenance works... In many places (not Sacramento, though according to the NYT), you'll only get ahead if your house appreciates several percent every year. Who can be sure of that?
Younger people are more likely to be moving to another place in less than 10 years: better think twice before getting shackled. Again: your mileage may vary, depending on the market and regulation in your country/region. Europeans think a hundred miles is a long way. Americans think a hundred years is a long time.
