Remember the question Should I Rent Or Buy where I wrote that a person should only buy a home if at least three of the four apply to you:
- You plan to live in your area for a long time.
- You work at a safe job that's immune from economic problems (for instance, the medical industry).
- You want a specific home and you have no thought of selling it later.
- You love buying and selling real estate, so when you take a loss, you can't imagine doing anything else.
As it turns out, high levels of home ownership can spell bad news for the economy:
Rises in home-ownership in a US state are followed by substantial increases in the unemployment rate in the state, a fall in the mobility of its workers, a rise in commuting times, and a drop in the rate of new business formation. The authors are careful to check, and they replicate, their findings for different periods of US history. The release of their work coincides with a new European study, done independently, which draws the same conclusions. That research, by Jani-Petri Laamanen at the University of Tampere, follows the effects of housing market deregulation across the regions of Finland.
Of course, Echo Boomers won't be buying homes for different reasons: they don't have money.