The June 21 issue of The Columbian ran an AP story by Josh Boak titled “Housing today: Owners OK, renters struggle.” Boak asserts that home “owners are thriving, while renters are struggling” because “they’re enjoying the benefits of growing equity, and reduced mortgage payments from ultra-low rates.”
I don’t know what country Boak lives in, as mortgage interest rates in the U.S. have been rising over the past several years. Also, equity looks and sounds good on paper, but is meaningless in terms of wealth until an owner sells at the market value and also elects not replace it with a comparable home (that also has been increasing in value).
Of course owners can choose to borrow against equity in their home, however additional debt is not a sound recipe for increased prosperity. Meanwhile, property taxes are levied every year based on supposed increases in home values but are paid every year in real money. The accumulated payment of annual property taxes almost always exceeds any increases in home value. This is apparently “thriving” in Boak’s world.
The AP story’s phony logic/economics and employment of terms like “thriving,” “struggling” and “economic inequality” is an attempt to generate resentment against homeowners. Meanwhile, the property taxes paid by these same homeowners provide the bulk of the infrastructure enjoyed by the entire community. “News” stories that promote class warfare don’t help anybody except politicians who capitalize on the resentment of their voters.
