Catherine Rampell at The Washington Post explains why buying a house is stupid (well, she puts it slightly more diplomatically).
The fact that Americans still financially fetishize homeownership baffles me. Never mind that so many people lost their shirts (among other possessions) in the recent housing bust. Over an even longer horizon, owning a home has not proved to be a terribly lucrative investment either. Don’t take my word for it; ask Robert Shiller, winner of the 2013 Nobel Prize in economics who previously became a household name for identifying the housing bubble.
“People forget that housing deteriorates over time. It goes out of style. There are new innovations that people want, different layouts of rooms,” he told me. “And technological progress keeps bringing the cost of construction down.” Meaning your worn, old-fashioned home is competing with new, relatively inexpensive ones.
I suppose there’s also the emotional continuity of numerous tense holidays in the same house. I’m not a holiday or even really a celebratory person (besides my eventual funeral) so I never quite understood it but I know the sentiment exists. Unfortunately, the changing economy makes it less likely that you’ll retire in the same house you bought when you got married. People move for jobs for far more often now, as a thirty-year commitment to a company is becoming a thing of the past in our brave new world of maximizing shareholder profits. Selling a house every five years or so is not just a headache but it’s usually a financial wash.