84 Ind. L.J. 189 (2009)
The Myth of Home Ownership and Why Home Ownership is Not Always a Good Thing

handle is hein.journals/indana84 and id is 191 raw text is: The Myth of Home Ownership and Why Home Ownership
Is Not Always a Good Thing
A. MECHELE DICKERSON*
Home ownership is viewed as key to achieving the American Dream  and is now
an essential element of the American cultural norm of what it means to be a success.
The metastasizing mortgage crisis suggests, however, that our home ownership
policies are out-dated, misguided, and largely ignore the actual market realities many
potential homeowners now face. After briefly describing the current home ownership
crisis, this Article argues that the United States should radically revise and restrict
home ownership subsidies. Rather than encouraging universal home ownership, the
Article argues that the government should replace existing home ownership subsidies
with targeted subsidies that will help buyers make housing choices that are based on
economics, not emotions.
INTRODUCTION
Home ownership is said to be a fundamental part of the American Dream because of
the economic security it gives homeowners. The United States has long encouraged
people to buy their own homes and has subsidized programs and activities that are
designed to bridge the gap between renting and owning a home. Unfortunately, buying
a house is no longer an option for many lower- and middle-income consumers; the
purchase is often a high risk financial venture that has large, and frequently
unarticulated, opportunity costs.
Buoyed by the irrational exuberance associated with home ownership, potential and
existing homeowners are now guided by emotional and psychological-not
economic-factors when they consider investing in a house. This irrational exuberance
has resulted in one of the worst foreclosure crises since the Depression. Rather than
question whether the American Dream of home ownership remains a goal worth
pursuing, however, the current responses to the mortgage crisis are designed to help
homeowners remain in their largely unaffordable homes. This Article argues that these
and other U.S. home ownership policies are outdated, misguided, and virtually ignore
the actual market realities most lower- and middle-income potential homeowners now
face.
Part I of the Article discusses the rhetoric associated with the American Dream of
home ownership and lists the benefits and subsidies the United States provides to
encourage home ownership. Part II of the Article discusses how escalating housing
prices and stagnating income has forced lower- and middle-income consumers to rely
on nontraditional mortgage products in order to finance their mythical American
Dream of home ownership. The U.S. government encouraged financial institutions to
innovate these often risky products, and the secondary market's voracious demand for
these products encouraged mortgage originators to approve loans that were not suitable
* Fulbright and Jaworski Professor of Law and Associate Dean for Academic Affairs, The
University of Texas School of Law. My special thanks to comments provided by participants at
a workshop at Emory Law School and for research and editorial assistance provided by Sarah
Barr, Jane O'Connell, and Claire Chandler.

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