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Debate renews: Dream or nightmare of home ownership?

Are folks losing faith in the American dream of homeownership? Or is this just a temporary backlash fueled by still falling housing prices here in Florida, where nearly half of our home mortgages are underwater?

The former seems to be gaining on the latter.

"To own or not to own" is once again a raging debate in the media. And it's top of mind among renters wary of getting stuck in a home with declining value, and among existing homeowners trying to sell into a market of skeptical bargain hunters.

Arguments resurfaced this month in a controversial cover story by Time magazine headlined "Rethinking Home- ownership: Why owning a home may no longer make economic sense." The story's key point? Homeownership's dark side is front and center with foreclosures, walkaways, neighborhoods plagued by abandoned properties, plummeting home values and a nation in which families have $6 trillion less in housing wealth than they did just three years ago.

"Easy lending," Time says, "stimulated by the cult of homeownership may have triggered the financial crisis and led directly to its biggest bailout, that of Fannie Mae and Freddie Mac."

Counterpoints that were no less vivid appeared in the Wall Street Journal, with headlines such as "10 Reasons to Buy a Home, citing attractive prices, cheap mortgages and the right to do what you want to the property.

So vigorous is the debate that the National Association of Realtors, the real estate industry's chief lobbyist, is fighting back by defending the "dream" of buying a home. Next week, an NAR seminar will look at ways to counter antihousing themes such as "whether the epidemic of foreclosures proves that government support of homeownership is a bad idea" and "whether the emphasis on homeownership has made for a less mobile work force" to "what the impact of fluctuating home values is on household stability."

Don't forget how real estate taxes on owned homes pay for local government budgets.

While traditional home selling suffers, bargain hunters are out in force. On Sunday, 330 people showed up at the Tampa Convention Center to bid on 145 foreclosed area properties. In all, $6.5 million was anted up at the auction.

Meanwhile, area home builders trying to peddle new homes in a bloated market are pushing aggressive incentives. K. Hovnanian Homes, with 10 area developments, offers to pay a buyer's monthly mortgage interest (the buyer covers the principal payment) for up to a year.

But housing confidence is slipping. A recent survey by Fannie Mae shows the number of people who say they consider housing a safe investment continues to decline, falling to 67 percent in July from 70 percent in January and 83 percent in 2003.

Bottom line? There are still believers, but the faith in Florida homeownership continues to be sorely tested.

Contact Robert Trigaux at trigaux@sptimes.com.

Fast facts

Top 3 reasons to buy, or not buy, a home

To buy:

1. Area home prices are down to 2003 levels. There are bargains.

2. Mortgage rates remain near record lows, making home ownership even cheaper.

3. It's now cheaper to buy a house than to rent in the Tampa Bay area.

Not to buy:

1. Mobility. Want to move quickly to get a new job? You may be stuck in a house taking a long time to sell.

2. Foreclosures and short sales — two ways to buy homes for less than market prices — make housing markets unstable.

3. Appreciation will be slow because of the for-sale housing glut.

Debate renews: Dream or nightmare of home ownership? 09/20/10 [Last modified: Wednesday, May 25, 2011 3:42pm]
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