The Great American Lie: “Everyone Should be a Homeowner”

It's time we questioned a cultural institution that promises affordability and financial security, but doesn't deliver either.

This article is part of The Forum’s Debate Series, in which student writers take opposing sides on issues of importance to public life. Read the other side of the debate here.

Credit: Flickr

These days, there is little that conservatives and liberals can agree on. Except for one thing: homeownership is the pinnacle of the American Dream.

As president, Obama declared that “the heart of the American Dream” is “the chance to own your own home.” Presidential candidate Kamala Harris called for increased down payment assistance, and Trump has promoted homeownership in numerous speeches, tweets, and legislation. Conservative pundit Tucker Carlson claims that homeownership is the “best measure of how your country is doing.” And in his opposing piece, my great friend (and debate opponent in this Forum series) Shiv Parihar ‘28 declares that owning a home is about “owning a share in our collective destiny.”

With all of this bipartisan support for homeownership, who would dare question it? Well, me. In fact, I will lay out evidence that America’s obsession with homeownership is not only financially harmful to individuals, but that it perpetuates housing shortages, systemic racial inequality, homelessness, and a false path to success.

I’ll begin by dispelling the most misguided defense of homeownership: that it is a sound investment. Let’s consider a thought experiment. Say you have a substantial amount of money to invest – $80,000, we’ll call it – and you go to a financial advisor for advice. She suggests the following: 

“Put all $80,000 into a single asset. There’s a small risk of your asset burning down, flooding, or getting swept away by winds, and a good chance that it’ll require thousands of dollars in maintenance and repair every few years. It will appreciate at a rate significantly lower than the stock market. You can’t sell it whenever you want, unless you want to be exposed to the elements. Oh, and that $80k was just the down payment – you’ll need to sink in another ~$330,000 on the principal and ~$450,000 on interest over 30 years.”

You would call that advisor insane! Yet millions of Americans wrongly justify their home purchases as “investments.” Since 1987, the Case-Shiller Home Price Index has tracked typical home values in the US. From 1987 to 2025, real (inflation adjusted) home prices have risen just 78%, while the real value of the S&P 500 has risen a dizzying 1,664%. And index funds hold a second, major advantage over a house: they are diversified, thus hedged against fluctuations in individual stocks. By contrast, the value of one’s home is highly dependent on prices in the small neighborhood around it. 

So no, Shiv, you can’t “raise your family in a stock portfolio” – but you shouldn’t act like your house is one.

Figure 1. Chart showing S&P 500 (red) vs. Case-Shiller Home Index (black) growth since 1987. The difference is stark. Source: Longtermtrends

Earlier, I called America’s relationship with homeownership an “obsession.” Why? First, the government has done lots to subsidize the practice, driven by a cultural infatuation dating back to the Cold War. Widespread homeownership wasn’t delivered by free markets, but massive tax breaks and cheap loans from government-sponsored enterprises. Shiv argues that, if anything, the government should go even further to “make homeownership accessible to all.” Why not make stock market investing accessible to all instead, providing Americans with an actual path to retirement and affordable college education?

Unfortunately, Americans seem to share Shiv’s outsized enthusiasm. This year, 90% of Americans said that owning a home is part of the American Dream, with the average respondent ranking it above “having a job they love,” “being married/having a life partner,” and “having children.” Really folks? Shiv would justify this ordering of priorities by arguing that one’s home is an “investment in their community and society.” It strikes me that finding valuable work and starting a loving family are better community investments than merely owning a structure. It’s a shame that most Americans don’t see it this way.

Figure 2. Survey of the “life goals” of 1000 Americans, with 1 as most important and 10 as least. Who needs love and joy when you can own a two-car garage? Source: Clever Real Estate

Let me clarify: I don’t think that homeownership is all bad, far from it. But it’s also not essential. Despite what you may have been told, you don’t need to own a house to raise a family or achieve economic success. I am not calling for everyone to live in apartments, nor do I consider suburban sprawl a “dirty phrase,” as Shiv retorts. In many cities, you can rent a single-family home in the suburbs for 60% less than the cost of buying while barely sacrificing on location or amenities.

There are plenty of valid, non-financial reasons to own a home. Some Americans own land for farming, hunting, or to escape regulation – it’s reasonable for them to own the structures on that land as well. Other homeowners want the freedom to paint their walls a different color or fill their front yard with new plants without getting a landlord’s permission. Others still simply enjoy feeling grounded and stable – fair enough.

The irony is that, for all the freedom homeowners seek, many are regularly deprived of it. Homeowners associations (HOAs) now oversee 53% of all US homeowners and a whopping 82% of new home development. Most HOAs prohibit non-regulation paint colors, unapproved plant species, personal mailbox decorations, too many pets, and loud music at night. HOA residents have been evicted for missing dues, taken to court over “brown” lawns, and fined hundreds of dollars for handing out free water. Sure doesn’t sound like good ol’ American freedom to me.

Figure 3. An actual HOA letter received by my parents (yes, admittedly I was raised in an owned home – it takes one to know one). We were chastised for “noncompliance” over “weeds.” There were, in fact, about five weeds. Source: my camera roll

Despite our cultural obsession with homeownership, prospective young homebuyers consistently feel “priced out” of the market. While home values have risen slower than stock market values, they have certainly outpaced Americans’ wages. Over the 1987-present period, during which real home values rose 78%, real median wages grew just 14%. In other words, homes have gotten exorbitantly expensive, while Americans’ earnings have barely budged – and yet, young people continue to see homeownership as a prerequisite for attaining the American Dream.

Disparities between wages and housing costs have real impacts – economists found a direct correlation between the cost of housing and homelessness rates, even when you adjust for poverty rates and unemployment. This is largely because American cities with the highest homelessness implement zoning laws meant to shield home values that inadvertently reduce housing supply. But even the “Abundance” liberals developing these critiques gloss over the core problem: too many of America’s homes are owned.

Homeownership is a zero-sum game for buyers and sellers. If I currently live in an owned-home neighborhood, I want home values in my area to rise; if you want to move into my community, you want home values to fall. One of us will lose – and usually, it’s the current homeowner that wins by fighting to artificially restrict supply. By contrast, if I rent my home, I’m perfectly happy for rents in my area to remain low, as would be someone who wants to move in.

Shiv provides his own economic evidence that homeownership causes better life outcomes, but these studies generally fail to hold up to scrutiny. He cites Robert and House (1996) to show that homeowners report better health. Yet the abstract of this paper reads, “financial assets, especially liquid assets [stock holdings], are associated with health throughout adulthood” – not homeownership. Shiv then points out that homeowners remain in one place longer than renters. I agree – that’s exactly what homeownership incentivizes. But being stuck in one place hurts American workers who could stand to gain by moving, especially those in the working class.

Figure 4. Sorry, Shiv, but Robert and House just “robbed” your argument for owning a house. Source: Robert and House (1996)

Furthermore, even when home values rise, not all Americans benefit equally. Homes in Black neighborhoods are consistently undervalued by roughly 23% of what they would be worth in non-Black neighborhoods (meaning a $400k home in a White neighborhood would be worth $292k in a Black one). In fact, homeownership has an insidious history as a covert method for racial segregation. American suburbia, specifically of owned homes, sprang up in the 1950s as a way for White, middle-class Americans to create racially homogenous neighborhoods outside of increasingly Black and Latino city centers. Homeownership may not have caused systemic racial inequality, but it certainly perpetuates it.

There are some legitimate concerns about renting that need to be addressed: namely, that renters are at risk of extortion by landlords and can be pushed out of their own communities by gentrification. The best solution to these problems isn’t homeownership, but local community organizing. Tenant unions, co-ops, and community land trusts have all succeeded in the US and abroad in stabilizing rent prices and fending off gentrification of cultural communities.

If you skimmed through this piece to the end, let me put it this way: homeownership in this country is a bit like a Green Beach party at CMC. Some people actually like it, but most of us have no idea why we’re there: we just followed the crowd, and now we’re paying the consequences.

Let’s shake this habit, America.