【正文】 From The Economist Home ownership Shelter, or burden? The social benefits of home ownership look more modest than they did and the economic costs much higher In a scene from the film “It’s a Wonderful Life”, a happy couple is about to enter their new home. Jimmy Stewart, whose firm has sold them the mortgage, reflects that there is “a fundamental urge…for a man to have his own roof, walls and fireplace.” He offers them bread, salt and wine so “joy and prosperity may reign for ever”. That embodies the AngloSaxon world’s attitude to home ownership. Owning your own roof, walls and fireplace, it is thought, is good for householders because it helps them accumulate wealth. It is good for the economy because it encourages people to save. And it is good for society because homeowners invest more in their neighbourhoods, engage more in civic activities and encourage their children to do better at school than do renters. Home ownership, in short, benefits everyone—not just the homeowner—and the more there is of it, the better. Which is why it is usually encouraged by the government. In America, Ireland and Spain, homeowners can deduct mortgageinterest payments from taxable ine. Yet the worldwide crash was bound up in this supposed miracle of social policy. The disaster began with defaults on American subprime mortgages, a financial instrument designed to spread home ownership among the poor. It gathered pace after the failures of Fannie Mae and Freddie Mac, two governmentsponsored enterprises that provide cheap home loans. As a result, the homeownership rate in America has fallen for four years, the first time that has happened in a quarter of a century. In 2021, families lost their homes or faced foreclosure—double the average before the crisis—reducing the homeownership rate from 69% in 2021 to % at the end of 2021. The number of owneroccupied dwellings also slipped in Britain in 202108 for the first time since the 1950s. Subsidised castles So attempts to expand home ownership have contributed to the wider economic crisis without succeeding in their own terms. How does that affect the arguments for supporting home ownership? Should it still be deemed a public good? No, say several economists and mentators. “Given the way US policy favours owning over renting,” writes Paul Krugman, 2021’s Nobel laureate in economics, “you can make a good case that America already has too many homeowners.” Edward Glaeser, an economist at Harvard University, talks about “the madness of encouraging Americans to bet everything on housing”. So far, policymakers are unmoved. In midFebruary Barack Obama proposed a $275 billion plan to support America’s housing market. Outside the AngloSaxon world Nicolas Sarkozy, who campaigned for the presidency to turn France into a propertyowning democracy, has expanded zerointerest housing loans for the poor. The main economic argument for home ownership is that, in the words of Thomas Shapiro of Brandeis University, “it is by far the single most important way families accumulate wealth”. This argument now looks as weak as house prices. In Britain prices have fallen 21% since their peak in October 2021. Prices in America have fallen more slowly but further, down 30% since their peak in mid2021 (see chart 1). This has reduced the total value of the country’s housing stock from over $22 trillion in 2021 to $19 trillion at the end of 2021. In the past few weeks, housing markets on both sides of the Atlantic have seen signs of life, but there is every chance that prices have further to fall before they finally reach their low. The collapse in house prices matters most directly to two overlapping groups: those who bought property at the peak of the market and now face “negative equity”。 and those (in America) who took out subprime mortgages. Roughly 10m Americans are in negative equity—ie, the cost of their mortgage exceeds the value of their home. In Britain about 3% of households are in negative equity. For homeowners, negative equity makes houses more like a trap than a piggy bank. Those who cannot meet their payments lose their house, their savings and (in America, usually) their credit rating for seven years. The other area of concentrated distress is subprime mortgages, which increased their share of the American mortgage market from 7% in 2021 to over 20% in 2021. According to the Mortgage Bankers Association, the delinquency rate was 22% in the fourth quarter of 2021, pared with only 5% for prime loans. Many people have concluded that, in Mr Krugman’s words, “home ownership isn’t for everyone.” However, a study