Today the Wall Street Journal had an article titled Housing Bubble Continues To Haunt Fed. Kelly Evans, who wrote the article was discussing the difficulty with calculating the cost of shelter for the CPI, inflation, and rising rents. Frankly, I’ve never seen the government having a problem– they just massage the numbers. Consequently, the article didn’t interest me much. What did interest me though, was the statement Kelly leads off with:
Americans’ love affair with housing is over.
I wondered why Kelly would say that. Certainly, we don’t have the buyer’s frenzy we saw at the height of the boom, but is the “love affair” over?
I wasn’t the only one who picked up on that statement. One of the commenters on the article, Neil Mcleod, said:
BTW, our love affair with housing is not over. In my economics class, when the students were asked what they would do if they suddenly won or inherited 100,000 dollars 90% said they would put it towards a house. After renting a crappy rental for a few years, owning is still the more attractive option, even when you know you might not make money on the deal.
There are a lot of folks who either cannot or will not buy at the moment because the economics of homeownership doesn’t make sense for them, but do they also harbor dreams of winning the lottery and picking up a deal on a McMansion?
Is the “Dream of Homeownership” dead, or dormant? Even with housing going into a “double dip”, my vote is for the latter. I suspect that American’s love affair with housing started when the Pilgrims stepped off of the Mayflower and they started planning America’s first log cabin housing development. It’s a love affair that has continued down through the years.
No, the “dream” isn’t over. It’s one of the reasons that people are more likely to throw reason out the window when investing in a home than investing in anything else. It keeps builders building even when there are record numbers of empty ones, and people buying when they can pay less for a rental. It’s one of the reasons that predicting any trends with housing is so difficult– people keep dreaming.
No, the love affair isn’t over. For one thing, I offer this as proof– people continue to read housing blogs, even the ones that maintain that housing as we’ve known it over the past decade is “doomed”. : )