eFinance Directory's list of "Rent vs. Buy Myths That Ruined The Housing Market" is great stuff, particularly if, like me, you're vaguely obsessed with the cultural premium placed on home ownership. Folks should read the whole thing, but I particularly want to amplify the fourth myth, which is that "buyers have assets, while renters do not." A house is called an asset, to be sure, and technically, it is one. But it doesn't work like a stock or a set of old stamps. People don't like to sell their homes to raise money. For one thing, when you sell your house, you're homeless. When you sell your stocks, you simply have fewer stocks. For another, there's an intense emotional attachment to a house, both as a storehouse of memories, as a manifestation of your success, and as a living space you've fashioned into a representation of yourself. The defeat people feel when forced to sell their home is very different than the emotional pain of divesting from a mutual fund. Moreover, as an asset, a house imposes a peculiar set of constraints, including making it harder for you to move out of town or live in a more desirable part of the city. Other types of assets, like stocks, have no similar drawbacks. So yeah, a house is an asset. But it's much more than that. And that often makes it a pretty bad, and pretty complicated, asset.(Image used under a Creative Commons license from Flickr user USR.) THE HOUSE AS AN ASSET.
eFinance Directory's list of "Rent vs. Buy Myths That Ruined The Housing Market" is great stuff, particularly if, like me, you're vaguely obsessed with the cultural premium placed on home ownership. Folks should read the whole thing, but I particularly want to amplify the fourth myth, which is that "buyers have assets, while renters do not." A house is called an asset, to be sure, and technically, it is one. But it doesn't work like a stock or a set of old stamps. People don't like to sell their homes to raise money. For one thing, when you sell your house, you're homeless. When you sell your stocks, you simply have fewer stocks. For another, there's an intense emotional attachment to a house, both as a storehouse of memories, as a manifestation of your success, and as a living space you've fashioned into a representation of yourself. The defeat people feel when forced to sell their home is very different than the emotional pain of divesting from a mutual fund. Moreover, as an asset, a house imposes a peculiar set of constraints, including making it harder for you to move out of town or live in a more desirable part of the city. Other types of assets, like stocks, have no similar drawbacks. So yeah, a house is an asset. But it's much more than that. And that often makes it a pretty bad, and pretty complicated, asset.(Image used under a Creative Commons license from Flickr user USR.) 
