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- Title
Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise?
- Authors
Beracha, Eli; Johnson, Ken H.
- Abstract
Homeownership is touted as the 'American Dream.' It is credited with enhancing wealth; increasing civic pride; and improving self-esteem, crime prevention, child development and educational outcomes, among other benefits. This article does not dispute any of these claims. Instead, this study hypothesizes that crowding toward homeownership raises the price of homes above their fundamental value resulting in the purchase of a home becoming a contraindicative action. After setting the holding period to the average American's tenure in a residence, renting (not buying) proves to be the superior investment strategy over most of the study period.
- Subjects
HOME ownership; LEASE or buy decisions; AMERICAN Dream; SELF-esteem -- Social aspects; INVESTMENT policy; REINVESTMENT; MORTGAGE loans
- Publication
Real Estate Economics, 2012, Vol 40, Issue 2, p217
- ISSN
1080-8620
- Publication type
Article
- DOI
10.1111/j.1540-6229.2011.00321.x