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Unraveling the Obsession of Homeownership

Published: at 12:00 AM

Following the American dream, the idea of owning a house is considered a fundamental part of life because of the economic security that gives to homeowners.

Many governments have long offered subsidy programs and activities designed to encourage people to buy homes and bridge the gap between renting and owning.

Unluckily, buying a house is no longer a choice for people from lower and middle-income classes, the purchase is often associated with high financial risks and many costs.

This blog post explores the complex web of homeownership obsessions that can negatively impact the economy.

A Painful Reality Check of The 2008 Crisis

The 2008 crisis resulted from a bubble, in which a new financial instrument failed (asset-backed securities).

The rise of housing prices in the years before was fueled by speculative investments, subprime lending, and low-interest rates.

Banks and financial institutions driven by a profit goal, were ready to give credit to homebuyers with poor credit scoring and a high risk of default. And that leads to an expansion in the demand in the market, which pushes the prices higher.

The mortgage defaults led to a decrease in the value of mortgage-backed securities held by many banks, and the prices in the housing sector started to decline.

As a result, Lehman Brothers, one of the prominent banks in the US collapsed in September 2008, like many other financial institutions that became heavily involved in subprime mortgages, which led to a loss of confidence in the financial institutions.

Is owning a house a sign of economic success?

Starting with the U.S., the homeownership rate continues to increase, and it’s about 66% in 2023. But it has a score of 0,921 on the HDI.

On the other hand, we have Switzerland among the OECD countries and it has the lowest homeownership rate (36% in 2021).

In Switzerland, few people own their homes yet the country is considered one of the most developed countries in the world with an average of 0,962 in the HDI score, along with Norway, and Iceland.

We can realize the differences between countries on cultural, economic, and social factors when it comes to owning a house.

External conditions and circumstances, like government policies and cultural ideologies, can lead to different perspectives on this subject.

Reevaluation of the American Dream

The 2008 crisis had a major effect on the worldwide financial system, and it has forced communities to rethink the reality of home possession and its consequences.

Also, thinking that renting is for young, or irresponsible people is not a valid assumption anymore.

The new model of the American dream should be related to having and designing a better life, a high-quality life full of new experiences and perspectives, especially if owning a house is not the right option for the person or the family, because taking credit leads to financial costs and risks that might go beyond the one’s capabilities.

There’s no such unique definition of success, unlike success must be defined by the person himself, based on his goals and perspectives and most importantly his beliefs.

The media cannot be a source of inspiration to determine your life goals, it’s a source of information that has hidden messages, and it always tries to convince you with certain ideologies, which can mislead you instead of leading you to success.

Bottom line

Whether you renting or you have a house, setting your life goals cannot be inspired by other parties’ opinions like the government, the media, or even the closest people.

Before deciding about purchasing something, think about all the different side effects that will be produced by this purchase, because you will be paying the mortgage plus the interest, which can fluctuate.

Sometimes renting can be more convenient than owning a house.

That was just my opinion, and of course, you can have a different view of the subject, and I would be delighted if you shared yours in the comments.


Check article on Medium👆