While homeownership is often desirable as a means for accumulating wealth and obtaining secure housing, it will not always be a good mechanism for either.
It's going to be hard to break folks of fifty years of subsidized wealth accumulation.
The Subprime Meltdown and the Ownership Society
By Dean Baker
Saturday, April 7, 2007;
A huge percentage of the easy-money mortgages issued to low- and moderate-income families in the past few years are going bad. This has led to bankruptcies for the big lenders in this market and millions of dollars in losses. The chain of defaults has also raised concerns about the mortgage and housing market more generally, and a growing number of economists view a recession induced by a housing crash as a distinct possibility.
The full effects of the collapse of the subprime market remain to be seen, but it is not too early to talk about the policies that got us here. In particular, the government policy of promoting homeownership should be examined.
Proselytizers of homeownership can be found in both political parties. Democrats have long argued for lending policies that allow easier mortgage credit to low-income families to help remove an important obstacle to achieving financial security. Republicans tend to frame their support for homeownership as part of their drive to create an "ownership society" in which everyone owns a piece of the country and can share in its prosperity.
The result has been a range of policies that promote homeownership while generally neglecting renters.
Delicious
Digg
Reddit
Newsvine
Furl
Google
Yahoo
Something's Got To Change
NOt a bad article, but of course it doesn't go far enough. I have a major major problem with the capitalist profit motivated societal daynamic that basically enslaves us. But I'm not even going to get into that rant right now. Most folks can't see their way clear to breaking lifelong habits of consumerism and chasing that almighty dollar.Â
So even though it's not in our best interests, we seem to want to be capitalists. Well if that's the case, why are we so fucking bad at it!?!?!?!? And even worse than that, we seem totally unwilling to learn, from our own mistakes or from anyone else. The only time Black folks listen to financial advice is when it's attached to some get rich quick scheme, that invariably leaves them poorer and dumber than they started.Â
I talk to hundreds of people about fincancial matters and 98% have little or no clue how money works in this society. The whole concept of property ownership as a linchpin of economic stability and wealth is a relic of the agrarian age. It is anachronistic, like most of our limited thoughts about finances. I used to be a mortgage loan consultant, but I spent more time talking people out of buying a money pit of a house than I did writing loans. For most people, if they really look at their financial situation, they would be much better off never getting into homeownership. It doesn't fit their lifestyle profile, and usually the homes they purchase are bought for sentimental reasons rather than financial ones. Most homeowners don't have an asset at all, they actuall have the biggest liability they never knew they could get into.
So we may not want to learn better, but if we are going to have any chance of surving in this system we had better pick up their rule book and start learning some of their tricks.Â
The Journey to Freedom Starts with Your Mind. http://exodusmentality.blogspot.com/