The underlying myth of home ownership in a capitalist economy is that you can have your cake and eat it. Having the cake means fulfilling a fundamental need: shelter. Eating the cake means reaping the supposedly inevitable financial rewards as the value of the property increases.
So strongly does this myth infect capitalist society that any departure from the ‘cake and eat it’ norm is greeted with dismay, outcry, and an attitude that somebody else is to blame (often the government) and must take steps to fix the problem.
A recent example: ‘mortgage prisoners’ caught making what has proved to be a poor housing investment. Now they look for somebody else, anybody else, to step in to guarantee their belief in both having and eating their housing cake. We’d suggest you read more in The Times of London: Reform ‘Won’t Free Mortgage Prisoners’ but it will be paywalled for most people.
The gist of the Times story is captured in the article’s title. People who have entered the housing market at the wrong time are ‘prisoners’ to their decisions. The article notes that recent financial reforms will not ‘free’ them from their bad gambling. The suggestion is that, unlike other forms of gambling in investment market activities, housing gambles deserve a special safety net where people will be ‘freed’ from their unwise obligations.
Capitalist society is founded upon investment in free markets and, if those investments are wise (or lucky), profiting from the financial gamble. Housing is the only capitalist market that seems to turn on a belief that investment success is somehow guaranteed, and that gambling losses for some reason deserve to be reimbursed by . . . who knows, exactly?
So myth-busting news that the housing market is no longer performing as expected can only foreshadow great misery for thousands, even millions, of ‘dream buyers’ who will wake up to discover that though their shelter needs may be satisfied, their major investment — housing — could be stagnant or worse: a tragic bust.
In the U.S., such a wakeup call may be looming on the horizon. Read more at Axios: The Missing Housing Boom