Consider a married couple making $60,000 a year. Suppose they buy a $200,000 home with a fixed-rate 30-year mortgage and $6,000 down. That’s hardly a reckless scenario. Yet if local home prices drop by ten percent, this family is $14,000 underwater. If their marriage or their furnace breaks, if someone loses a job, this couple is in real trouble. If family dislocations arise from broader economic difficulties that depress local property values, they are in even deeper trouble.More here.
Progressives should be chastened by the history of the housing mess. We need to rethink the all-American aspiration to widespread home ownership. When our society offers no guarantees to buffer instability and risk, we need other, safer ways to support families and neighborhoods, and to promote upward mobility.
Saturday, August 27, 2011
Why liberals need to rethink housing policy (Me in TNR)
A great philosopher notes in the New Republic: