For centuries, owning a home has been marketed as part of the American dream. Historical figures like George Washington, who committed a significant portion of his time to the delicate art of home renovations, serve to cement this notion in our societal consciousness. However, my experiences as a homeowner and observations as a journalist suggest that we need to reevaluate this long-held belief.
I remember the day my screen door fell off due to old age and metal fatigue. It took a trip to the hardware store and a few hours with my dad and his drill to fix it. Fast forward a few weeks, and I found myself dealing with a roof leak, despite having replaced it last summer. It seems there is always something – the furnace, plumbing, fence, or even a troublesome tree encroaching on essential infrastructure.
This constant battle, coupled with hours we spend on routine tasks like lawn upkeep and painting, make me question whether home ownership is truly worth it. After all, when I decided to buy a house, I was hoping for a place to sleep and store my books, not an endless list of additional hobbies or responsibilities.
But then again, buying a house is supposed to be a good investment, right? I argue otherwise. As I recently detailed in Above the Law, home ownership is a risky venture with very poor financial returns when compared to other investments. Our homes are subject to an array of risks, from natural disasters to the financial burden of insurance premiums.
Moreover, while there are indeed studies that show homeowners are better off financially, my hypothesis is that this is more a cause of wealthiness, not the result of it. People often buy homes because they are financially capable to do so, not because they are looking to improve their financial standing. Occasionally, owning a home may help deter unnecessary spending simply because it’s the asset you live in. Nevertheless, this does not detract from the fact that homes are a poor store of value.
Against this backdrop of shaky financial returns and relentless maintenance demands, the allure of home ownership starts to fade. The choice to rent, on the contrary, starts to become much more appealing. With reduced maintenance responsibilities, the cost of insurance and property taxes spread out among many renters, and a more sustainable housing option, renting seems more in line with the reality of modern living.
As if that weren’t enough, there is one more point to consider. Fear not, renter friends, you’re likely making smarter investment decisions than most homeowners out there. A simple stock market index fund has proved to be a much better investment over time than a house, even in a rising real estate market.
So it appears that the true American dream has moved away from owning a home. Instead, it finds itself nestled comfortably in smart, researched investments and an easier, maintenance-free way of living.