Economics and Finance, The 21st

Let’s not buy into housing market magic

No, we don’t need houses for the American dream or a thriving economy.

The NYT rightly went after a Super Bowl ad that I only sort of caught while shoveling guac into my mouth this past Sunday. In the ad by the reputable Quicken Loans, the narrator describes their mobile app for mortgage applications, and the process of home buying that leads to more jobs, by way of buying furniture and all the other things you want in a home.

Now to be fair, the company says the mobile app makes the platform for applying for a mortgage easier–it doesn’t change lending standards. But the ad is misleading all the same–it equates greater mortgage lending and home ownership with stronger growth and happier America. (The app here is not the problem. The narrative it pushes is.)

It’s not even been ten years since ’08, and here we are. Some think that housing can single-handedly drive the economy, and forget that it can single-handedly crash it, too. Why do I have some hope this time?

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This generation is all about renting, putting off home buying. We might stay that way, or we might become like our parents, just later. My hope, though, is that even if we pour into the housing market, it doesn’t become this magic bullet around which the U.S. economy is based. It’s brought us a lot, and was behind a lot of the innovation and growth in the 20th century.

But I’ll be damned if we need any more McMansions to feel like adequate human beings. I really don’t want to go back to the days when people were buying multiple homes they didn’t need (only to find out it was a bit misguided to borrow heavily for that kind of scheme). My hope with this generation is that the structure of demand is changing permanently–we’re already seeing it in the stock market, as this sarcastic article notes:

Let that sink in for a moment: Airbnb – which allows people to rent out their homes for strangers to have sex parties in – is worth more than Macy’s and Best Buy – both of which sell stuff – combined.

Who are these Millennials throwing our entire concept out o[f] “value” into a logic blender?

In 2009, after months upon months of shopping around and paperwork, my parents bought their first house since the one we left in 2006. It was an enormous pain, and I heard about it every day. But they were so glad to finally have it, perhaps late to the party on owning to their dream home.

A few years later they told me that it was more work to maintain than they expected, and that was in fact draining. They dreamed of renting again. The house is probably going on the market in 2016.

My hope is further that we’d be happy with owning a home, or renting a decent apartment, and not need an oversized house or two to feel like we’ve made it. Then again…modesty is overrated.

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