NAR on Home Ownership and….the wall street journal???

Owning a home is one of the best ways to build long-term wealth, and NAR has the data to prove it. But not surprisingly, the Wall Street Journal continues to beat the anti-homeownership drum in favor of stocks, despite the fact that most investors have recently lost more than 30 percent of their lifetime stock portfolios.

It seems James Hagerty is once again trying to convince people that housing is not a good investment, despite data to the contrary. (“Americans still see real estate as their best shot at wealth. It may be wishful thinking,” Wall Street Journal, 12/1/08).  The fact is, owning a home has proven to be one of the best ways to build wealth over the long term. If Hagerty had contacted NAR, which has compiled the world’s largest set of housing data, he would see that the long-term value of homeownership is supported by extensive historical data.

Instead, in building a case against homeownership, he references the S&P/Case-Shiller index, which samples a mere 20 major market areas, many of which have seen tremendous price volatility over the short term. It makes headlines for its sensationalism, but is not a representative or realistic measure of home values over time.  Ostensibly, the reader should infer that housing is a bad investment and stocks are good. Anyone with a pulse in this country knows that most investors have recently lost more than 30 percent of their lifetime stock portfolios, but the Wall Street Journal isn’t telling its readers that stocks aren’t a good investment.

Interestingly, Hagerty then contradicts his original thesis, quoting Moody’s forecast that house prices will increase about 4 percent a year over the next few decades. Finally, he reaches an epiphany, remarking that “most of this is just guesswork, though.”  Apparently, just guessing has taken the place of responsible journalism at the Wall Street Journal.

 

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