The great American home-ownership hype

September 22, 2014

home-ownership-hypeThe great American home-ownership hype is just that: hype. Because the facts just don’t line up.

Here’s what shocks me: the number of people I know who go through unbelievable things just to own a house.

They commute four hours a day. Or work two jobs. They forgo vacations and other things that would give them a much higher quality of life.

They add an incredible amount of stress to their lives for the privilege of having…

….a mortgage.

Sometimes a big one.

Life becomes all about making a mortgage payment. Or not making it.

It shocks me that so many people believe that if they do not own a house, they have failed.

That being unable to afford their mortgage is something to be ashamed of.

That without home ownership, they have lost the American Dream.

What a bunch of bullshit.


Would it surprise you to know that before 1950 less than half of Americans owned their homes? In some states and areas, the number was significantly less than half.

That the “American Dream” was hype originated by the mortgage and realty industries?

Here’s a news flash: you can live very well without owning a home.  In fact, in many more circumstances than you might think, renting is the wisest financial decision. By a long shot.

But we don’t think it through– we buy the knee-jerk idea that home ownership is necessary.

Look, for most of us, the days when people bought a house and built substantial equity over 30 years are gone.

So are the days when a couple stayed in a house their entire lifetime.  My parents stayed in their second home until they got old, but I’ve had way too many homes to count in that same time span. People are more mobile today.

Tax breaks are not that significant for most of us.

The housing market is not always healthy. For many, the home is not as the investment it once was.

Buying home means obligating yourself to way more than a mortgage. It means taxes (sometimes, substantial), insurance and maintenance. Sometimes, a hefty condo fee.  These are not insignificant financial obligations.

We own our current home free and clear, but there have been many periods of my life when I was a happy renter.  And I would rent again.

Here’s what I love about renting:  the freedom.  I can leave without needing to sell a house and possibly (probably) losing money.

I also love the savings. No property taxes.  No big insurance policies.

And best of all, renting has fewer repair hassles: when the (A/C, plumbing, fill-in-the-blank) breaks down, someone else pays for the fix.

So let’s stop thinking not owning a home is the end of the world. It’s time for an attitude adjustment. A shift in thinking.

To my friends who are hanging their heads because they have or  might lose their homes, start thinking creatively.

What if you didn’t jump through ridiculously complex hoops to “keep the house?”  What if you could live within your current means, and pretty well and without encumbering more debt?

What if you found a nice rental home?

What if you didn’t buy into home-ownership hype?

What if you were surprised at how much better your life was without a mortgage?

52 comments on “The great American home-ownership hype
  1. Carol Graham says:

    Agree wholeheartedly and figured it out quite a while ago — got out of our mortgage, sold our house and are living happily ever after as renters. You said it all. We saw too many of our friends lose their houses in the 80’s and then more recently many who had to walk away from their equity and their homes in the last 10 years. Many don’t understand and say “But you are paying rent to someone else and you end up with nothing!” No……I end up without the hassle, the stress, the repairs, the taxes, the market crashing and losing ten’s of thousands of dollars in equity when I have to walk away.

    Well done, as always, Carol!

  2. I know that for me, a house is a better choice because I have never had anything but bad experiences with rental. Unbelievably high rent that goes up every year as opposed to mortgage payments that stay roughly the same year to year. Neighbors who kept me up with loud music and parties. Awful maintenance. Bad smells. I’ve had very few problems in either of my two homes that would make me EVER want to rent again.

    Maybe it’s because I’ve rented mostly in college towns or maybe I’ve just had really bad luck. But I think my house is the better choice for me.

    • It’s always a better choice when you can afford it and don’t sacrifice quality of life. HOwever, lots of folks got caught in adjustable mortgages and couldn’t afford them when the payment adjusted. My point is not that home ownership is a bad idea, it’s that it is not the only way to live well and not owning one doesn’t make you a failure.

      • I see. I was reading on my phone and may have missed something. 🙂

        I would now ALLOW the Realtor to show me homes I couldn’t afford. She was VERY put out with me, and ended up foisting me off on an underling. I looked at several homes per day, several days per week for over five months before finding one I liked, in a good neighborhood, that I could afford. And that wasn’t already under contract.

        I got my house for a steal because the sellers were paying two mortgages and just wanted OUT. My mortgage payments started out slightly higher than rent, but now are way below what I was paying for rent.

        But like you said, it requires a little fiscal responsibility and a lot of soul-searching. And a LOT of not listening to other people tell you how to live your life. 🙂

  3. If I ever find myself in a rent situation, I’ll see if I agree with you then. However, (I love you but) I disagree. Well, and I agree too. Refinancing our home when the interest rates were really low found us in a position of our home being appraised about 150k lower than what we paid for it. After sucking that up (so freaking hard to comprehend and accept) we are now about 5 years away from paying off the mortgage. I’ve never had buyers remorse about owning any of the four homes that I’ve lived in as an adult. And they all went up in value at sale time. Meaning we profited enough to be able to buy a bit bigger. Anyway… there is no shame in renting, I do agree with that. But if I ever find myself not owning a home, I will be the proud owner of a home on wheels, and I’ll never look back as I travel out the rest of my years. xo

  4. Jennifer W says:

    THANK YOU so much Carol for saying this. I have been trying to tell people that home ownership is overrated. Yes, I currently own a home, but wish we didn’t quite frankly. And not necessarily for all the reasons you stated, which are good and very valid. I dislike owning a home because of the time “suck.” The year we rented our home or the years we have lived on a military installation (very few and far between) have been the years we traveled and spent more family time together. There is always something to do or fix with a house. I am not sold any longer 🙂

  5. Liv says:

    I guess I’m on the other side here too Carol. I’ve owned my own home since I first got married to my ex husband. The money we got (although it was less than it should have been) when we exited the marriage allowed me a cushion to survive on with two kids as a single mother. Without the house, I would have been penniless and had to start all over while my landlord would have profited (we’d owned for 10 years). Granted – it may have been quicker to exit if it was a rental, it was worth the wait for the extra money. While I waited for the divorce to be finalized I did rent – but as soon as it was, I jumped back into home ownership and haven’t looked back. I hated the idea that I was lining my landlord’s pockets when I could have lined my own for those 18 months. And, whether you look at it that way or not – you are paying property taxes and for all the “fixes” if something gets repaired. It’s all added into your rent, plus a profit for your landlord if he’s smart.

    • I think that’s great, but are you really on the other side? Because there aren’t really competing viewpoints. If you look at my post again i hope you’ll see that I’m not talking to people like you, who can afford your home mortgage. I’m talking about the many people I know who feel like failures because they got caught in an adjustable mortgage and lost a house or are sacrificing quality of life to own a home. My point is that a mortgage is not the only way to live well and people who fall on hard times and can’t own shouldn’t feel like they failed or are “less than”. I know too many people who feel this way and I’m offering a different view of home ownership. I’ve had great rentals in my life and they’ve saved me a lot of money. I never felt embarrassed like some of the people I know do. I embraced it as right for me at that time.

      • Liv says:

        Yes – you’re absolutely right. Home ownership isn’t for everyone – and certainly you shouldn’t feel like you’re “less than” if you’r renting. And certainly when the housing bubble burst a lot of people were left in a sticky situation because of immoral mortgage practices and people taking on too much without thinking it through (or having it explained to them). Nobody should be embarrassed to rent.

  6. I don’t disagree with you- there is no shame in non-home ownership, and there are even advantages like mobility, and no property taxes, however, there is something to be said for the environment that surrounds the seriousness of homeownership- the responsibility and stewardship of maintaining, even improving, your home, and the ripple effect it has on neighboring property. And, in my experience, my landlords have always objected to my choice of wall color. -wink-

  7. Ricki says:

    I’ve always been a renter, despite trying to buy several times. I do what I need to as a parent that wants my child in a particular school district, but have moved 4 times in 12 years. To someone saddled with a mortgage and the expenses of ownership it can sound like a utopia not having to pay for day-to-day maintenance, repairs, etc., but it’s not all it’s cracked up to be. The cost of taxes and repairs is most certainly covered in my rent and my landlord is doing this for profit, not out of the goodness of his heart. I pay much higher rent than most homeowners/mortgage holders I know, and have nothing tangible to show for it in the long run.

    Last January when a pipe burst in my home last winter, due to extreme on-going cold, the landlord paid for the damage to be repaired. He is a responsible landlord who lives up to his obligations per our lease contract. However, I had no choice of repairman, and had to accommodate a surly, uncooperative contractor who decided to leave me without a ceiling or insulation for 2 months. The resulting heating bill (my expense) was ENORMOUS.

    My previous landlord was a very different type of person. The home was a burden to him and he refused to do even the smallest repair or maintenance. 5 raccoons in the attic? Tenant’s fault! High hats falling out of the ceiling? Tenant’s wear and tear! Broken pilot light on the heater? Electrical short in the wall? Putting the house up for rent without telling me (at the same rate I was paying) only to counter my surprise with an offer to raise my rent? I quickly found a place to relocate after only 1 year. THEN… when I waited a year to file in small claims to get my security deposit back, he, an attorney, filed a suit against me in Supreme Court for $50,000, that required me to hire an attorney of my own in defense. 4 years and over $15k of my dollars later, he let the case fall off the calender and settled for what he could have just given me back in 2010.

    There are definitely pros and cons to both sides, and I love my current home, but at the end of the day, I’d much rather have been able to buy any of the houses I attempted to over the years. Unfortunately, the same school district I am trying to keep my son in is one that is in high demand with people that have much deeper pockets than I.

    • Wow. Well, let’s see. The house we bought is lovely but the kitchen is not to code and we are going to have to fix that at our expense. Our hot water heater just went out, as did one of the toilets and an outside spigot. thankfully our home warranty covered it but we had no choice of repair company either and despite 3 weeks notice they are installing only a few days before we leave for two and a half weeks. Not that I’m nervous or anything. I had a cozy rental in this same area 15 years ago that I loved and a responsible landlord. Same thing when we first moved back here 5 years ago, a good landlord. My real point is not that renting is better, it’s that renting is not a failure.

      • Ricki says:

        I agree it’s not a “failure”, despite what all my family tell me when they freely dispense their opinions on my life. As I point out, the ones that live in the city spent upwards of $45k/yr per child for private school, on top of their penthouse mortgage. I pay less than that per year in rent and my son’s public school is consistently in the top rated schools in the country.
        The OCD in me despises waiting for other people to get around to fixing things I have to live with in a way I have no say in. I could own elsewhere, but rent here because of the school. That’s a choice I made, but I’ve been in this place 5 years and still haven’t completely unpacked/decorated. I have no plans to leave, and I love my home, but it doesn’t feel permanent.

  8. Karen says:

    We’re currently in the process of getting ready to sell the house we’ve lived in for 14 years…and when we do sell, we’ll likely buy something much smaller.

    Liv is right that while renters don’t see the “extras” as actual bills, they’re built into their rents; and some landlords are less than congenial or cooperative when it comes to repairs. I agree, though, that it’s silly to feel so attached to the idea of home ownership that you bankrupt yourself (emotionally, physically, financially) to keep doing it.

  9. I think this is great advice.
    Three of our 5 kids were hurt bad by there first mortgage companies. One lost her home and it was devastating for her. She is afraid to buy again. She is happy renting. The other two had to rent out their homes to cover baloon mortgage payments and rent elsewhere themselves.

  10. Nancy Hill says:

    I detest mortgage companies. They are predatory even when not explicitly engaging in predatory lending, If the system were more fair it would be a different story. So I agree with you. I also have been in the same house for 24 years, paid it off, mortgaged it again to finance a master suite addition. Such a racket, but being a girl from the country, I like owning the land beneath my feet.

  11. Ellen Dolgen says:

    This is a brilliant blog. You are so right…people seem to think owning a home is one of life’s most important goals. Thanks for bringing these facts and perspective to the forefront!

  12. Haralee says:

    I agree. Renting is not for everyone but neither is buying! The adage of you are throwing away money if you rent can be a bit incorrect.

  13. I’m right there with you, Carol! My husband lost his job last year and we relished the excuse (OPPORTUNITY) to get out from under a house that would soon lead us down a deep, dark hole. And the myths you talk about? All of them were true for us: We had to pay to get out of our house after having bought at the height of the market in 2008, just two months before it all crashed. It’s good that we really wanted to rent because we didn’t have any money for a down payment on another house, cuz that’s what your equity is supposed to be for, right? Right!

    We’ve said we’re not interested in a home of our own again unless we can pay cash for it or have a mortgage that looks more like a car payment. The relief of having the maintenance on someone else’s shoulders is so freeing. It’s the right choice for us for sure, and nothing anyone can say, most of which was relevant about 30 years ago, will change our minds.

  14. Growing up my parents owned, then rented, then owned again. And every house, regardless of who owned it, was a home. I am grateful that neither of my parents got caught up in the “have to’s” that are dished out in life, they simply did what was right for the family at any given time.
    As you said to one of your commenters, there is no, one size fits all, in life. So true.

  15. After being a homeowner for most of my married life, we now rent. I’m thrilled that when the faucets drip or the sink stops up, I don’t have to do anything but call the landlord. I’m not so thrilled that the equity I had in my last house is slowly (!) slipping away to pay the rent. That scares me.

  16. To each his own. Home ownership works for some, renting for others. Nothing is perfect, and everyone has to decide what’s best for them. Personally, I love owning my house.

  17. Michelle says:

    I bought the house we live in 6 years ago. It’s the first house I’ve ever owned. Honestly? I prefer renting. When my son graduates in two years, we plan on selling and resuming our life as renters.

  18. I agree wholeheartedly. There is a bunch of angst associated with home ownership. While I am a property owner, I do not believe in home ownership to the detriment of everything else. There is no shame in renting.

  19. Lana says:

    I totally agree – and we’re already seeing a small shift in the Seattle area. Cities are developing mixed use areas, with condos to rent on top and stores below. We should stop selling that owning a home is the only way to achieve the “American Dream”.

  20. Ines Roe says:

    I see what you are saying and can see the benefits of renting – after all my husband was in the military for 30 years and we moved every 2-3 years – renting every where we went. When we finally retired it was such a relief to buy a home and with it the knowledge that we were going to settle down and watch the roses bloom. The idea of owning a home has been the idea of “roots” and that is a nice feeling – I guess it is more of an emotional thing. Having said all that I totally understand what you are saying and the freedom of not having the roots – knowing you can pick up quickly with nothing holding you back.

  21. This is an example of conventional wisdom that does need to be reassessed once in awhile, and individualized.

    Good prompt to do so!

  22. Ruth Curran says:

    We have been renting since we moved to California 5 years ago — sticker shock in the beginning and now we can go where the wind blows us next with the emotional turmoil of selling.

    Most of all though Carol, the graphic in the middle of the piece cracked me up! I am still chuckling about that severed CRAP. Thank you for the smile!

  23. When we sold everything 3 years ago when I got sick and my husband lost a business be and I put our blood, sweat and tears into fo 19 years. We were left with little we chose to move far away, he started a total different career because I was now disabled and needed better than average health insurance. We decided to rent because we didn’t know how it would work out. Three years later we still rent and have never been happier. We have twice the room than when we worked 12 to 14 hours a day to pay the mortgage. We spend more time together and even under the circumstances are happier than we’ve ever been.

    • Yes, my point here is not to say that everyone should rent but that it has its advantages and that people shouldn’t kill themselves to own –and I do see a lot of that in the Bay area. Good for you, Rena!

  24. Great post! I own my home, but not free and clear. As much as I enjoy making it my own in terms of design and for family, I’m looking forward to renting, also. The problem is that I’m confined to one school district for a few more years and the rental prices are often the same as my mortgage. I want a rental home, not an apartment. Keeping my eyes open next year. Thanks.

  25. bodynsoil says:

    Being married to a mortgage isn’t the easiest thing in the world. When you own your own home you make the purchase in hopes that home prices increase enough to make your investment worth while. If you factor in taxes, repairs, maintenance, labor (yours), interest, and the original home price; the investment earnings need to be big enough to cover all those expenses.

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