Crazy gnome guy thinks you should own a home so he can live in its walls and scare your kids.
"U.S. policy is based on the premise that everyone should be a homeowner," says Krugman. "But here’s the thing: There are some real disadvantages to homeownership."The column reads like Krugman didn't really have time to discuss the disadvantages of home ownership, but he's absolutely right. There are quite a few. And you rarely hear about them. The culture pushes strongly towards owning, in large part because it hasn't updated itself to the contemporary realities of owning. Before the 60s, home ownership was far less common. The GI Bill and Fannie Mae and Freddie Mac weren't fully in place. So owning a home -- which often meant owning a home outright -- was evidence of financial success, and signaled economic security. You had to clear a fairly high bar before you could ever sign the papers.But today, owning a home looks a whole lot more like renting. Fairly few homeowners actually "own" anything. Rather, they have a sizable mortgage, and they pay money to a bank. That's not all that different than paying money to a landlord. Additionally, home ownership used to correlate strongly with financial success because there were a lot of barriers to entry. As James Surowiecki likes to point out, "buying a home used to require a sizable down payment: in 1976, the average for a first-time buyer was eighteen per cent. By contrast, a National Association of Realtors study of first-time buyers between mid-2005 and mid-2006 found that almost half put down nothing at all, and that the median down payment was just two per cent. If you earn eighty thousand a year, no one will lend you four hundred thousand dollars to buy stocks, but plenty of people were willing to lend you that money to buy a house." This changed, in part, because government policy changed. Banks didn't magically start offering better deals. Rather, the U.S government passed a bunch of laws that made it easier for folks with relatively little money to buy a home. That had some good effects. But it also tended to sucker in a lot of folks who weren't financially stable enough to own a home, but saw owning a home as a path to financial stability, rather than the outcome of financially stability. The order of operations got reversed. 
