There are forces that eagerly want you to enter these institutions—the federal government with homeownership, nagging family members with marriage, and society as a whole for both. You hear over and over that entering into these commitments is the fulfillment of a dream. But neither homeownership nor marriage is right for everyone. And if you’ve got a bad match, the bonds of either will feel more like handcuffs than the path to happiness.
Sure, there are ways to get out of these institutions. Neither is necessarily permanent—in fact, it seems like more and more, neither is permanent. But whether you’re escaping a bad marriage or escaping a bad mortgage via a short sale or strategic default, there are plenty of literal and figurative costs you incur by walking away. Despite that some people claim it’s better to married and miserable than never married at all, or that renting is short-sighted and just plain stupid, you’re far better off never buying the wrong home or marrying the wrong person in the first place. Homeownership (or marriage) can be a dream, but it can also be a nightmare.
Rutgers economics professor Eugene N. White, writing an op-ed today in the WSJ, reflects on how renting—and moving regularly—was how his dad and grandparents survived the Great Depression. Renting helped them not merely to survive, but enabled them to adapt quickly to the housing and jobs markets—and even to put some money in the bank. He writes:
The government of the 1930s had no programs to promote home ownership for Americans through the expansion of the mortgage market. Had they been saddled with a fixed-payment mortgage, my grandparents would have been squeezed as their incomes fell and might have ended up on the street with their sons. As renters, they were able to adjust more easily to economic decline and even save some money for education and retirement.
Nowadays, we’re told of the foolishness of renting compared to buying. We’ve been told of the importance of homeownership, of the soundness of it as an investment. White questions this wisdom, in light of how renting freed his family in a way that homeownership never could:
What a contrast to the fate of America’s subprime families shackled to a mortgage. No financial adviser would ever suggest that they invest all savings in one asset. But that’s effectively what has happened because of the relentless promotion of home ownership for everyone.
There’s nothing wrong with homeownership, or marriage. However, the assumption that they’re right for everyone is wrong. When it’s right, you know it. You’re not gambling. You’re aware of your partner’s faults, and you’re OK with them. You’re not crossing your fingers, hoping that you can change you’re partner into something he or she (or it) is not. You’re not expecting to be able to upgrade to a trophy home (or wife), at least not in the near future.
So if you’re really hesitant, if you’re not sure that it feels right, then you’ve basically made your decision. Play the field. Stay single. Rent.