“Owning a home lies at the heart of the American Dream,” George W. Bush once said, and US policy certainly seems to agree with him. Mortgage interest is tax deductible, and government-sponsored enterprises such as Fannie Mae provide cheap financing for home buyers. Why is that, asks Paul Krugman of the New York Times. Owning a home isn’t for everyone, so why should it be a policy goal?
There are real downsides to being a homeowner. Mortgages are financially risky propositions—just ask subprime borrowers. Owning a home also ties workers down, making them less likely to move even if their local job market goes sour. Homowners also tend to flock to the suburbs, where $4 gas can make commuting an expensive proposition. It’s time renters got a fair shake—and equal stake—in the “American Dream.”