A Case Against Homeownership

Against all odds, both political parties agree on at least one thing: the merits of homeownership. But is buying a home really such a great investment, even for the well-off?

2 minute read

September 29, 2016, 12:00 PM PDT

By Philip Rojc @PhilipRojc


Home For Sale Signs

caswell_tom / Flickr

The received wisdom is that it's just better to own a place. And even after the shambles of 2008, that hasn't changed much. Emily Hamilton writes, "Even though the financial crisis revealed the risks that homeowners take on by making highly leveraged purchases, policymakers are still developing new programs to encourage home buying." 

As the housing crisis made clear, low-income people shouldn't take the decision to buy lightly. "Joe Cortright recently pointed out that homeownership is a particularly risky bet for low-income people who may only have access to credit during housing market upswings, leaving them more likely to buy high and sell low."

Even for those in a stabler financial position, buying a home isn't necessarily the best investment. "Politicians across the political spectrum tout homeownership as key to a middle-class existence, but homeownership will make many buyers poorer in the long run compared to renting." Renters, after all, can theoretically invest that down payment into vehicles that pay greater long-term dividends. But it should be noted that this argument depends a great deal on where you buy.

Hamilton discusses the faults of online "buy-versus-rent" calculators that may be skewed to favor buying property. And she emphasizes another downside of buying: it reduces mobility in an economy that prizes it. 

From the article: "Often, home ownership simply leads to higher levels of housing consumption rather than wealth-building. [...] But from a policy perspective, does it make sense to encourage people to save up for a poor investment, or would those resources be better spent on financial literacy programs?"

Tuesday, September 13, 2016 in Market Urbanism

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 9, 2025 - Diana Ionescu

Map of Haussmann's redesign of Paris in the 1850s through 1870s under Napoleon III.

In Urban Planning, AI Prompting Could be the New Design Thinking

Creativity has long been key to great urban design. What if we see AI as our new creative partner?

June 30, 2025 - Tom Sanchez

View of dense apartment buildings on Seattle waterfront with high-rise buildings in background.

King County Supportive Housing Program Offers Hope for Unhoused Residents

The county is taking a ‘Housing First’ approach that prioritizes getting people into housing, then offering wraparound supportive services.

July 11 - Real Change

Aerial view of suburban housing near Las Vegas, Nevada.

Researchers Use AI to Get Clearer Picture of US Housing

Analysts are using artificial intelligence to supercharge their research by allowing them to comb through data faster. Though these AI tools can be error prone, they save time and housing researchers are optimistic about the future.

July 11 - Shelterforce Magazine

Green bike share bikes parked in a row on a commercial street with outdoor dining and greenery.

Making Shared Micromobility More Inclusive

Cities and shared mobility system operators can do more to include people with disabilities in planning and operations, per a new report.

July 11 - Cities Today