The American dream–alive or dead?  Still?  The question of the shifting attainability of the American Dream could anchor the news every night.  Perhaps it should.  We inhabit the Age of Mobility–but fret not.

To rent of buy is a big question and our political leaders hold a critical piece.  The way they reform the tax code may alone decide.

In  Bloomberg Businessweek, April 2017, we beheld Steven Mim’s “Ahistorical American Dreams” article.  In total Steven says “Declining home ownership does not mean the American dream is dying.  Home ownership has declined but not really in historical terms.  Of those 35 or younger home ownership stands at 31%.

 

 

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In addition to stagnant wages and high debt, including student debt, the slide may also reflect the growing awareness that…

…investing most of your wealth in a single immovable ill-liquid asset isn’t such a good idea after all.”–Steven mins

Question: where do you want your assets when the next financial fiasco occurs?  Keep in mind cash earns nothing.  If your assets were in the equity market during the ’08-’09 sub-prime mortgage meltdown your losses were huge.

Fact; the rate of home ownership is only loosely correlated with the benefits of ownership.  We all eschew financial options everyday for every reason.

When the stock market trap-door’s triggered where do you want your assets?  If not a home, where?  What other appreciating asset is one allowed to live within?  In most markets real estate does appreciate.

 

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Housing prices fluctuate, yet have always historically appreciated.  In total, the cost of living only increases.  That includes rent.  By purchasing, one fixes much of the cost of housing, thus providing both financial visibility and stability.  Rents rise but mortgage payments do not.  Home owners insurance rates and maintenance costs rise, but so does the value of the underlying asset.

Renters see only the downside of real estate values.  Owners experience both sides.  Liquidity in home ownership is a problem for those seeking total mobility.  Yet liquidity and mobility remain more lifestyle concerns.  Lifestyle choices carry consequences, including financial.  The takeaway seems to be that home ownership does not fit well with those living highly-mobile lifestyles.  We’ll attest to that.

Who can blame renters anyway?  They rate as victims.  Adapt or die.  Who wants a house when 1000-worker production lines are moved around like linebackers, and college profs are migrants?  Need we point out that anyone 35 or younger was robbed, yes robbed, of years of prosperity by the wholesale greed of the mortgage industry and Wall Street?  These repeated catastrophic actions by the financial industry remain a sweeping generational crime.

Our Department of Justice is wearing a frown.  She does not sport a scale in this case. None have been charged.  None have been indicted.  None will be–it’s over.  The United States Department of Justice pursued no one, indicted no one.  Big banks, sleazy mortgage lenders, worthless parasitic rating agencies, and the drunk-blind SEC , all walk, while victims continue paying for decades.  It was simply a a wealth shift.  All but the victims wittingly conspired, thus producing a crime so big you can’t take it in, let alone link the dots.

 

 

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The actual size of many financials makes them “Too big to prosecute.”  The surging unrelenting corporate greed that created the meltdown also crushed the prosperity of an entire generation.  Joblessness, rampant economic instability, and  a sea of ruthless, ham-handed, foreclosures, soured perceptions of the system, a system still broken without end.

Don’t Buy if: Your industry’s highly  mobile.  You can’t or don’t  itemize deductions.  Or, if you can and do, and congress takes away that mortgage interest tax deduction.   Wanna be an absentee landlord?

If the U.S. Senate squeegee away the tax deduction, as they are yet considering, we can say goodbye to many more prospective home-owners.  But then, a recent report cited that only 1% of tax payers actually claim the mortgage tax deduction.  Sounds low to us.

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StockJaw

Images sourced from Pixabay.

https://pixabay.com/en/photos/

 

Additional resources:

http://www.investopedia.com/

https://www.schwab.com/public/schwab/client_home

 

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