Tag Archives: homeownership

Regretting buying a house when it is “just what a person does”

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Americans generally promote homeownership. Owning a home might prove to be an unsatisfying experience:

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“We have two kids, two full-time jobs. We don’t even have time to talk about the repairs we need to make or what we should do,” she says. “We don’t make nearly enough to hire a house manager or nanny or anything like that, so even when things do go wrong, we don’t have time to figure out how to handle it or even who we would need to hire to outsource it.” A house manager may sound like a luxury (and it is). But the share of couples with children in which both parents work full time is now 52 percent, up from 31 percent in 1975. When both parents work outside of the home, the labor of taking care of the home, in ways large and small, doesn’t simply disappear…

Thomas, in Seattle, echoes this sentiment. He was in his late 30s when he bought, feeling that it was “just what a person does.”…

So, sure. He, in true millennial parlance, “did the thing.” But what did he lose in the process?

This is a common refrain in so many of the stories I’ve heard about homeownership: We gave up the things that made our lives meaningful in order to have the thing we thought we were supposed to want…

A house is meant to be the foundation of stability and safety in our lives. Instead, ours is a high-pitched stress alarm.

Owning a house does require maintenance and resources. This has always been true. Even newer homes that might appear to require few repairs might need a lot of time to maintain.

So what has changed that the work that goes with homeownership is problematic? A few ideas based on this article:

  1. A cost/benefit analysis approach to life is an interesting way to live. Is this everything about being efficient and opportunity costs? People today have some different ideas about how they would like to use their time and what they find meaningful.
  2. There are more older homes for people to purchase. Many homes have survived decades. The single-family tract homes built in the postwar suburban boom decades are largely still around. They may need substantial repairs. Our standards for what is needed in homes – certain appliances, how kitchens should look and operate, great rooms, etc. – are now different.
  3. American society as a whole may have shifted toward consumer goods that should be great or are broken and disposable. How much maintenance can we do with smartphones or appliances or vehicles or homes? How much patience do we have for repairs and restoring and preserving when it is easier for many items to simply replace?
  4. The high cost of homeownership influences all of this. If people are going to make such a significant financial investment (and also expect certain financial returns), any decisions about or additional resources needed are notable. Buy a house, even with help, in a really expensive housing market like Boston and Seattle and it is frustrating when that really expensive housing is difficult to maintain.

Thinking further, I could imagine homeownership that requires no maintenance through either (1) built-in repair and maintenance services from the beginning (factor it into the purchase and mortgage costs) and/or (2) switching homes regularly to avoid major repairs (similar to how cars have points where costly repairs are likely such as 60,000 miles or 100,000 miles).

When “everyone is chasing water” in the suburbs

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Suburban communities in Arizona are trying to make plans for supplying water in future decades. This could come with significant price hikes:

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To officials, Queen Creek is a model of how to confront the Southwest’s water woes head-on. The city expects to ultimately spend $730 million to tap into faraway groundwater, insulating themselves from drought for decades to come.

But a proposed “water resource fee” to fund the project has brought furious pushback from the highest water users in town, in a conservative place where leaders pride themselves on lowering taxes. It’s also renewed long-standing tensions over whether Queen Creek is expanding too fast for its resources, as city officials say they expect their population to nearly double by around 2050.

Other Southwest metropolises are facing similar questions about how to keep growing in arid places where water is scarce and getting more so. Arizona’s desert cities are in an especially tough position because they hold more junior water rights than other cities that draw on the Colorado River, such as Los Angeles, Las Vegas and San Diego…

The average single-family home would pay an extra $57 or $138 a month once the water fee is fully phased in, officials said, depending on the details of their usage…

Incorporated in 1989 as an agricultural community of just a couple thousand people, the city’s population has grown to about 90,000, and the water issue stoked doubts among some longtime residents that the rapid change was good for them and the town.

Rapid suburban growth presents a particular set of challenges, including establishing local infrastructure that can meet the current and future needs of the community. Water is essential to daily life but is not as easy to secure in some places compared to others.

While it sounds like current residents and officials are wrestling with how to pay for current and future needs, what might this do to forecasted suburban growth? Would a community turn down growth because of not having enough water? Or would people attracted by cheaper housing here say no to a house because of water prices or water uncertainty? Would growth in a metropolitan region significantly shift toward communities that have secured future water and prices?

This applies to water in Arizona but it might also apply to other community needs. If gas and electricity prices are higher because of power needs and grid concerns. If prices suddenly spike for constructing roads, bridges, and highways. A need for internet equipment but that material is not available. And so on.

The bigger picture issue might be this: the price of a house is important for Americans. This story discusses water and hints that the monthly costs of owning a home might significantly increase. For these homeowners in Arizona, can they predict water prices five or ten years down the road? The house might look reasonable now but utility bills can cause a lot of people problems.

From homes help Americans build wealth to home values as the key to the whole economy

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Some time ago, Americans shifted toward seeing homeownership as a means to having and building wealth. The next step might be to suggest that this wealth based in homes is holding up the economy:

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Those high prices are real, but are also a bit of an illusion, investor Bob Elliott argues in a post this week…

That perception is making a lot of homeowners feel relatively well-off — and helping drive consumer spending, which powers the economy.

“Without the perception of high prices there is a significant threat that the key linchpin of the whole economy might start to unravel,” Elliott wrote…

For now, the housing market recession isn’t really dragging down the overall economy. If anything, people are still spending money because their homes make them feel rich. It’s just sort of a weird situation.

This is the argument: American homeowners have a lot of wealth in their homes so they spend more on other things because they feel like they can rely on that wealth to back their purchases or debt.

This sounds different than what we saw in the late 2000s. When home values plummeted then, it triggered larger numbers of missed mortgage payments and foreclosures. This led to problems for banks and financial institutions. A bailout ensued.

The piece above suggests that if home values stagnate or fall, this would affect consumer spending, which then affects the whole economy. Either way the whole economy was affected; all the financial losses in the 2000s affected all sorts of areas even if the biggest hit was to banks and financial firms. Here, lower home values would change what people might spend on new smartphones or on food or on entertainment or clothes. A downturn in spending in an economy that relies on consumer spending would be bad news.

Put it another way: what would Americans not buy or spend on if home values had not risen as much as they have in the last decade or so?

Using increasing home equity to pay off other debts

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The investment many Americans have made into houses or housing units has another benefit: helping residents pay off other financial obligations.

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Americans continue to spend freely, keeping the economy humming, even as they amass more credit card debt. But like Ms. Boroski, many homeowners have built up a nest egg to help pay for their lifestyles: $35 trillion in home equity, a record high…

Household debt increased 3 percent in the first quarter of 2026, to $18.8 trillion, from a year earlier, according to a report from the Federal Reserve Bank of New York, using data not adjusted for inflation. Mortgages made up the biggest chunk of that total, but credit card balances climbed 6 percent to $1.25 trillion from the year before.

In the same three months, homeowners withdrew an estimated $47 billion in equity, up 2 percent from the same period in 2025, according to a report from the Intercontinental Exchange, a financial services company. Second mortgages amounted to $25 billion, a 1 percent increase from a year earlier, but refinancing existing mortgages to take cash out jumped 18 percent year over year to $22 billion…

Financial brokers are seeing more refinancing activity across the country, as more people seek to pull themselves out from under a pile of bills.

This is a possible outcome when so many housing values have risen in recent years. Of course, that larger housing value is just a number until someone sells (or property taxes are due).

It also highlights those who cannot access this financial cushion. This includes people who cannot purchase housing in the first place or people who do not have much equity.

And, perhaps the most important feature is in the first paragraph above: “Americans continue to spend freely.” Some of this is on required items for day to day living. Costs keep going up. Yet, the linked article suggests: “there are hints that more Americans are taking the opportunity to spend more on what they want, not just what they have to buy.” If consumption is both a way of life and an essential part of the economy, looking for ways to leverage assets to keep it all going becomes helpful or even necessary.

Compared to New York City, Chicago has a bigger tradition of homeownership?

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In discussing proposed ordinances to protect renters in Chicago, the Chicago Tribune contrasts renting in Chicago and New York City:

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And New York has less of a tradition of ownership.

Most Manhattanites have traded the advantages of owning their own place for a life in a great city. Chicago, historically, has not required that trade-off but has offered both.

You can rent an apartment until you can save enough to afford to buy a condo and then maybe a small home as your family grows. Or you can use the rent you get from one apartment in a two-flat to cover a mortgage and live upstairs yourself.

Our big advantage over cities like New York, you might say.

I wonder about these claims. Here is why:

  1. Both cities have different neighborhoods or boroughs. This is part of who they are: the cities annexed neighborhoods and communities as they grew and these different places have unique histories. Both have sizable central business districts. Both have residential neighborhoods. Both have areas with lots of rented units, other areas with more homeownership.
  2. The comparison to Manhattan seems to be doing a lot in the argument. Manhattan has a lot of residents – roughly 1.6 million – but the borough accounts for less than 20% of New York City’s population. Manhattan is expensive but it is not the same as other parts of the city, even if housing is expensive in New York City and the region overall compared to many other places in the United States.
  3. The desire for homeownership is related to but different from the ability to purchase a home. Do people in New York City want to rent long-term or is that what is more available? How do people in New York and Chicago narrate their desired paths and then what is possible?
  4. The editorial hints at an ongoing comparisons of Chicago to New York.

Communities preparing for possible property tax reductions in Florida

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With the possibility that Florida residents will soon vote to significantly lower property taxes, communities in the states are trying to get ready:

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The proposal is spurring urgent responses from local governments faced with the prospect of plummeting tax revenue. Cities and counties are scrambling to prepare for a potential overhaul of how they pay for all sorts of services, from policing to pothole repairs.

Local officials across the state say the issue is dominating discussion in commission meetings and budget workshops. Among the measures they have taken so far: freezing hiring and capital projects, planning possible service cuts and floating proposals to increase other fees and taxes to offset the shortfall…

In the 2027-28 fiscal year, the Florida changes would reduce property-tax revenue in the state overall by nearly $5 billion, according to the Office of Economic and Demographic Research, a research arm of the legislature. That would increase to $8.8 billion in 2028-29 and $10.8 billion in 2030-31.

The amounts would vary widely for individual counties, with a large one like Miami-Dade projected to lose $304 million in the first year and a small one like Okeechobee expected to lose $3.7 million, according to an analysis by the Florida Association of Counties. Suburban counties with high proportions of homestead properties would face the sharpest exposure, and economically distressed small counties would be the least equipped to respond, the study said.

Americans generally do not like the idea of high property taxes. They like the idea of homeownership but do not always like the idea they should pay more taxes on something they own.

At the same time, this tax helps fund many of the local amenities and services Americans benefit from and participate in. When looking at amenities about communities when making choices about where to live or when discussing local features and amenities they like, property taxes likely contribute. This includes schools, parks, and police and fire departments.

The tradeoffs I wonder if Americans are willing to make: either or both (1) lower levels of local amenities and services and (2) less local control over local services and amenities for lower property taxes. Immediate financial benefits for property owners but a loss of quality of life? How this plays out in Florida might help

Prediction of 25 years until median American house worth $1 million

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A recent projection looked at how much American homes will be worth in a few decades:

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The median U.S. home price will likely hit $1 million around the year 2050, when the millennial generation is hitting the traditional age of retirement, a top housing economist has predicted.

“Essentially, in about 25 years the national median home price will be a million dollars,” Lawrence Yun, chief economist at the National Association of Realtors®, said at a conference in Washington, DC, on Tuesday. “It may be hard to envision that, but back in 1990, the national median price was $90,000.”…

Last month, the national median sales price for existing homes was nearly $430,000. Yun used multiple scenarios to project home prices out into the future, and says each scenario pointed to roughly the same timeline to hit $1 million: about 25 years.

This makes sense over time as inflation continues. Compared to the past, houses and many other goods are more expensive.

But three factors might make this hard to swallow for a number of people:

  1. How much will incomes and wages keep up with the price increase of houses? Will housing be further out of reach by 2050? A million dollar price for a home will be easier for people to understand if pay keeps up with those values.
  2. There will be people in housing who remember the lower prices of the past and a good number who will benefit from them. Those who owned homes in 2026 will recall the median at $430k and wonder – and enjoy, if selling – the new median of $1 million. Just as those who lived in the early Levittowns saw their homes increase in value over the decades, so will those who bought homes in the early 2000s.
  3. Some places will have much higher median home values in 2050 compared to others. While this is true today, that gap may grow and highlight differences between metropolitan regions.

I wonder if the biggest consequence of this continued rise in home values will be that houses in the United States will be regarded first and foremost as investments. If the median value can double in 25 years just by owning it, this can shape who owns homes and how they treat them.

The rising costs of homeownership

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Americans like the idea of owning single-family homes. Would they give that up if homeownership is too expensive?

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A home buyer in 2019 could expect to spend about $20,000 a year on basic homeownership expenses: mortgage payments, property taxes, insurance, maintenance and repairs, according to data from Intercontinental Exchange and home-services marketplace Angi.

By 2025, that annual bill had soared above $28,500, outpacing inflation and keeping many would-be buyers out of the market . Homeowners who wish they could sell and move elsewhere are also staying put, turned off by the cost of purchasing today…

Home-insurance and property-tax costs have also climbed in many parts of the country, affecting home buyers and longtime owners alike.

Insurance costs have risen due to persistent natural disasters and increases in material and labor costs for home repairs. And rising home values have pushed up property-tax assessments, sparking pushback from voters in some states…

One of the appeals of the postwar American Dream was that owning a house could be as cheap or even cheaper – a claim in Levittown, for example – than renting. If homeownership was financially doable, Americans jumped at the opportunity.

The article cited above suggests a different story: homeownership has gotten more expensive. The costs have gone up more than inflation and it does not look like they will go down soon. (Interestingly, there is no mention of comparisons to rent costs.)

Given the decades-long interest in homeownership, how close to homeownership and renter costs have to be for people to choose buying a home? If Americans increasingly think of homeownership in economic and investment terms, what is the tipping point in the numbers?

If homeownership costs continue to go up more than inflation, it will be interesting to see what adjustments are made to help homeownership be within reach for more people. Different financial instruments? Higher wages? More housing programs?

Some programs offering housing assistance to residents with higher incomes

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As housing prices have gone up in recent years in much of the United States, some assistance programs now offer monetary help to people with higher incomes:

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Down Payment Resource, a company that compiles information on more than 2,700 home-buying programs, shared data with The Washington Post that showed more than 115 programs have raised their income threshold requirements since 2023. In most of those cases, the programs now offer aid to would-be home buyers whose income is above their local median, sometimes well above.

Memphis, for instance, now offers down-payment assistance to households with twice the local median income that purchase in designated areas of the city. San Francisco offers loans of up to half a million dollars for first-time home buyers; a single person with income up to $218,200 can apply…

Adam Grubbs, who runs a municipal down-payment-assistance program in Aurora, Illinois, said local leaders there decided to use municipal funds (about $300,000) to give middle-income households support similar to a federally subsidized program for low-income buyers.

“It’s those police officers, your fire department staff, nurses, teachers: those people that, they do have good jobs, but with this housing market it’s still unaffordable for them. Even they need help trying to buy their first house,” Grubbs said.

These changes get at some key questions underlying how Americans view housing and housing policy:

  1. Who needs help regarding housing?
  2. Who deserves help regarding housing?

More broadly, is housing a human right, a privilege, available to those with the right resources, for those who work hard as individuals, or something else?

These changes in programs also remind me of a quote from a former Bank of England official: “Most countries have socialized health care and a free market for mortgages. You in the United States do exactly the opposite.” Providing homebuying assistance helps people achieve homeownership, a goal viewed as desirable in the United States.

Conversations in local communities can often help answer these questions. Local residents and leaders often have a sense of who they would like to see live in their community. Take the quote above involving Aurora as an example; municipal housing funds are designated for civil servants, potential residents that serve and who are seen as contributing to the community.

High housing prices and inheriting a house in California

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What if housing prices were so high in some American markets that a regular way people acquire homes is through inheritance? Take the case of California:

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About 18% of all property transfers in the state last year, representing nearly 60,000 homes, were made through inheritance, according to a recent analysis by real-estate data firm Cotality.

That share is a record for California in data going back to 1995, up from 12% in 2019. It is also roughly double the national share of 8.8% last year…

The state’s high rate of inherited homes reflects California’s unique circumstances: years of skyrocketing home prices, and tax policies that encourage owners to avoid selling their houses before they die.

The people who inherit these houses enjoy tremendous benefits. They can move into homes that they otherwise might not be able to buy at current prices, or they can sell them and keep the proceeds without having to pay capital gains taxes.

But the high rate of homes passed on after death is distorting the state’s housing market, favoring longtime homeowners and their families over all other home buyers.

The postwar idea of suburban homeownership included social mobility, the idea that someone could work hard and purchase their own house and plot of land. Follow the American pathway to success and it would end in homeownership.

But what if this does not always work out? Or if conditions in some places mean that the typical path does not work for a good portion of people? This postwar expectation was not necessarily available to everyone even then; communities and programs were not open to people of all races and nationalities.

The California case is one where observers can see that this social contract of homeownership is or is not working. Can a regular worker or household find a home in California? Wasn’t a lot of California’s growth due to this postwar social contract? In the American social and economic system, is inheritance a preferred or a good way to obtain a home?

It also remains to be seen whether the trend in California becomes the norm in other American settings or whether it is an isolated case with a unique housing market.