Ben Jones' Housing Bubble Blog is full of news today about the continuing losses on Wall Street and some politicians' homeowner bailout plans.
Megan McArdle, a blogger for the Atlantic, today resurrected an article by Holman W. Jenkins, Jr. of the WSJ. His article suggested that homeownership might not provide a financial panacea for low-income households:
"A typical low-income household might spend half the family income on mortgage costs, leaving less money for a rainy day or investing in education. Their less-marketable homes apparently also tended to tie them down, making them less likely to relocate for a job. . . . For the sake of people trying to climb into the middle class, let's hope that one lesson will be a rethinking of policies designed to saddle them with money pits."Megan McArdle then writes under Housing: a blessing or a curse?:
"Yes, housing has performed very well over the last few decades, but a lot of that increase stems from a serious of idiosyncratic factors that will not be repeated:
The rise of the long term amortizing mortgage after World War II, which pegged prices to monthly incomes The long fall in nominal interest rates after Paul Volcker got serious about inflation The increase in the value of the mortgage income tax deduction Ever-rising demand from the baby boomers as they move through their life cycle--a trend that is about to halt, if not reverse."