ยป Mortgage is the New Marriage
The price of housing is based on people’s ability to pay for it. The desire to own a house is so strong that people will make huge life changes to afford it. I think this buying power of a two-income couple is a major incentive for marriage. But it’s a race to the bottom: couples get married because single people can’t afford houses; single people can’t afford houses because couples are buying them.
Cultural desire for the actual ritual of marriage has decreased as desire to own a house has increased. Market timing adds an urgency to house buying while there’s no obvious time to get married. So now common-law couples buy houses together. Building a home together is a similar commitment to building a family together:
- a shared mortgage forces financial interdependence
- consequences of a split are just as serious as a divorce
- the community recognizes the sanctity of joint ownership
- housewarming parties are like wedding receptions
Before I’m statue-barred from giving general investment advice: Buying a single family home basically guarantees a middle class life. That’s fine if you started a poor renter, but if you started middle class it’s not moving the ball forward at all, if you care to do so.
The upfront costs are high and are better invested in, for example, rental property, not a place to live yourself. In economics-talk the opportunity cost of buying a single family dwelling is far, far, far larger than we are lead to believe by our society.
Here’s a simple analogy: Imagine you’re a grain broker and you buy a load of grain to re-sell so you can take care of your family. However, instead of doing that you grind it into flour, make bread, and feed it to your kids. Mission accomplished, perhaps, but a very large false economy.
Or, as was laid down by our forefathers in The Ten Crack Commandments:
Jack
20 Aug 09 at 10:31 am
I intend this post to be the start of a critical series on home ownership: would you like to upgrade your comment to a post?
Jared
20 Aug 09 at 10:53 am
Homes used to be based on one income, the man’s income. When woman started working the banks took advantage of this and increased rates. As as single woman I will never be able to afford to buy a house, barely even a crappy condo. I like the idea of having a house, but don’t like the idea of having to pay for it until I die, or even after I am dead! I would take a house if someone gave me one, but I don’t think I will ever buy one, especially in the city. Though I can picture myself buying a house, easier than I can picture myself getting married.
Karen
20 Aug 09 at 3:12 pm