Stacked articles are drawn from regular conversations between Dr. Peter Linneman and the Haystack editorial team. Each article focuses on an insight critical for real estate investors.
“I don't begrudge the NAR any more than I begrudge Estée Lauder. Both are selling the same promise: you're better off with the product.”
A New York Times piece this spring made the familiar affordability argument: the average American home has gone from two and a half times household income in 1950 to nearly five times today, the most dynamic metros are the least affordable, and the country needs more homeownership to keep the path to upward mobility open.
The article's premise is that homeownership itself is a social good, that a better life is there for you and your home-owning neighbors. The research doesn’t agree: there’s no evidence that home-ownership itself has an impact on social stability. Other factors, like crime rates and school quality, are key drivers, not ownership rates. What exists behind the aspiration for home-ownership, instead of truth, is marketing.
"We have an industry that spends over the years a staggering amount of money convincing people they're better off owning a home," Linneman says. The NAHB, Fannie, Freddie, HUD, and the NAR have sold ownership the way Estée Lauder sells youth. And the rent-versus-buy math often, over the long term, favors renters. Depending on the period, a renter who put what would have been the down payment and maintenance dollars into the S&P actually came out ahead.
"We have an industry that spends a staggering amount of money convincing people they're better off owning a home."
The reference to 1950’s norms also is a ruse. Since then the composition of the average household’s spending has changed in many ways; we now spend multiples more on education, healthcare, and travel, and multiples less on food and clothing, with no one alarmed. An increase in our spending on housing is not inherently a problem.
Still, 83% of Americans would rather own a home than rent and 62% of renters “worry” they’ll never be able to own a home, according to a 2024 LendingTree survey. For multifamily and build-to-rent investors, it might be time to start your own marketing campaigns about the long-term benefits of renting… you’ve got the truth on your side.
From The Margins
A little of what’s out there.
In 1901, divers exploring an ancient shipwreck off a tiny Greek island pulled up a corroded lump of bronze. Inside were gears.
A lot of gears.
What they had found was a 2,000-year-old mechanical computer capable of modeling celestial movements and predicting eclipses decades into the future. Turn a crank and an intricate system of precisely cut bronze gears moved dials representing astronomical cycles. Modern imaging has revealed inscriptions describing the movements of the Sun, Moon and the five planets known to the ancient Greeks.
The strange part isn't just that the Antikythera Mechanism existed. It's that nothing else remotely like it survives from the ancient world. The kind of complex geared machinery it contains wouldn't reappear in the historical record at a comparable level of sophistication for centuries.
Link: https://www.smithsonianmag.com/history/decoding-antikythera-mechanism-first-computer-180953979/
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