I’ve been pondering this question for the last couple of days. I’m starting to think that it’s a combination of massive social pressure, and our own human delusions.
For instance, I read an article recently where a journalist made a very reasonable argument about why she was happy to have sold their house, relieved to be renting, and why. The comments were mainly frothy mouthed internet trolls repeating the same old “houses are an investment” lines.
It makes me wonder what’s driving people to blinding only accept “the Truth” – that it should be everybody’s ultimate life goal, to own their own house, and to spend the rest of their lives paying the mortgage, and “upsizing” every 10 years or so.
Firstly, the financial reasons. The main argument is that renting is “throwing money down the toilet”, and that paying $1500 a month on a mortgage is far better than $1500 in rent. This argument is a bit of a misdirection – they are not comparing apples to apples. A $1500 a month rent is probably for a nice 3 bedroom house. The $1500 a month mortgage might be for a unit or apartment. Depends on where you live of course. In my case, $1500 gets you the house rental, and $1500 a month mortgage a dingy, shed of a multi-family unit, that’s leaky and uninsulated. Chances are it’s in a dodgy area as well. Houses here are ridiculously overpriced, obviously that’s not the case as much in the US anymore.
But even if you do manage to find a fair comparison, what about rates/taxes? What about maintenance? The inflation lifestyle that drives you to buy more furniture for your new house, that encourages you to build on, renovate or modernise, under the mistaken impression that it’s adding capital value to your house. It may do so, it may not…
Secondly, the happiness/contentment reason.
Studies have shown that home owners aren’t even happier than renters. I’ll have to find that one sometime tomorrow when it’s not almost midnight. But a study showed that when income and age are taken into account (since increased income increases happiness to a point), home owners weren’t happier – in fact, they experienced more “unhappy”/depressing moments during the day than renters. And bizarrely, they spent more time on housework.
Thirdly, the social reason – my own theory. I think that since it is socially accepted to always buy a house and raise your family, most people try and buy a house at some stage of their life (or are saving up to do so). The ones that are paying off their house are seen as successful. The ones that do not, are “generally” bad at saving money, or have run into debt or other personal problems. They are the reckless ones, the youngsters living the high life, wasting all their money on themselves. The logical fallacy is then made that people without mortgages are therefore irresponsible, reckless spendthrifts. Just the immediate image you may see of a “dirty, careless renter” vs a “white picket fence, mortgage owner” shows the social biases we may have.
I personally would love to own my own home, however I have reasoned that it won’t make me happier (it may make me unhappy), it does not financially make sense. And now I’m just getting tired of having it shoved down my throat all the time. I’m getting to the point where I’m making a point of *not* buying a home, just to go against the grain of “common sense”.
Ah, and the best part of renting vs owning a home – no unforeseen expenses (Landlord takes care of breakages/natural disaster accidents etc). And freedom to move whenever you want – good job opportunities elsewhere, or the local job market dries up, or say an earthquake wipes out your city – no problem!
To conclude, owning a house will not automatically make you happy. It will probably encourage you to spend more. And it might not even be financially the best option compared to renting.
So why all the froth in the mouth?