Don't worry: Homeownership can still be a great investment

It's become trendy to suggest that homebuyers are dupes. That's ridiculous.

Home buying
(Image credit: (Joe Raedle/Getty Images))

All of a sudden, a chorus of analysts are claiming that homeownership is a poor investment. Josh Barro took two cracks at it, one at MSNBC and another at The New York Times. John Aziz and Ryan Cooper came to similar conclusions here at The Week. But all of these arguments share the same basic flaw: They fail to account for the rental savings that make up the majority of the financial return that flows to homeowners.

At the most basic level, a home is a capital good that "produces" a continual flow of housing services. This continual flow of housing services is quite valuable. You can even sell it off in chunks to other people. That is, after all, how landlords make their money.

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Matt Bruenig writes about poverty, inequality, and economic justice at Demos, Salon, The Atlantic, The American Prospect, and The Week. He is a Texas native and graduate of the University of Oklahoma.