The WSJ has a nice piece explaining how many homeowners will be much better off renting, even if this means defaulting on their mortgages. At the height of the bubble, many people in policy positions, who should have known better, continued to push homeownership as a way to build wealth. When the bubble burst and house prices plummeted, these new homeowners suddenly found themselves with huge amounts of negative equity. Rather than acknowledging their mistake, many of the homeownership ideologues want to keep people as underwater homeowners, even if that means paying much more for their monthly mortgage and other ownership costs than they would pay to rent a comparable home. This is good for the banks, but horrible for the homeowners. and a almost a sure way to guarantee that they don't accumulate any assets.
--Dean Baker
