One of the unspoken questions in all the discussion about subprime making home ownership available to all comers is, “Why do we want people to own homes?” After all, here was President Bush today in his subprime speech: “Owning a home has always been at the center of the American Dream”.
There is, perhaps unsurprisingly, oodles of research on the subject, and the answer is more equivocal than naive views of the subject would make you think.
In summary, the benefits to society of homeownership are smaller than typically advertised, and they are inconsistent. Deep subsidies are usually required — hence subprime, as a market “solution” — which are not always optimal. And there is a related question:
Do American prefer to own their own homes, or do they prefer the kinds of dwellings that are usually offered for sale (as opposed to the kinds offered for rent)?