I recently saw an article which stated that for homeowners “their houses are like piggy banks.” But if you own your house, an increase in its value doesn’t seem to help you in any real way, since to realize that gain you’d have to sell it. But then you’d have to buy or rent another place to live, which would also cost more. It seems like the only concrete effect of a rising housing market for most homeowners is an increase in their insurance costs. Am I missing something?
In: 1833
Rising home prices is actually bad for most people, excepting those who own multiple homes or apartment complexes. The problem is that the American legal system and American development patterns inhibit the construction of new affordable housing. As landlords’ power and political influence grows they become more able to extract value from the economy without needing to invest in improvements or new construction. Its a runaway reaction. Landlords are absorbing all economic growth and not innovating.
Regular single home owners think it is good because they see their net worth grow, but they don’t realize that their buying power isn’t really growing at all.
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