Homeownership has gotten a bad rap, said The New York Times.  ” Since the housing bust, renting has been in and owning a home has been out, especially among young adults who in earlier decades would have been first-time buyers.”  Today just 64.3 percent of Americans own homes – a 20-year low!  That’s a shame since homeownership long has been central to Americans’ ability to build wealth.

In 2013, the median net worth for homeowners was $195,400 compared with just $5,400 for renters.  Buying a home simply forces people to save – for both the initial down payment and monthly mortgage payments.  And while the housing bust proved how risky homeownership can be, the lesson of that debacle is not for individuals to avoid homeownership or for policymakers to devalue its importance.

A wiser path is to foster conditions that allow more middle and lower-income Americans to climb onto the housing ladder, including smarter regulations governing lenders, better consumer protections, and more robust wage growth.  Renting can make sense as a lifestyle choice or because of income constraints.  As a means to building wealth, however, there is no practical substitute for homeownership!