Surprise: Shiller, NAR differ on the MID | Katonah NY Real Estate

Homeownership has helped Americans who might otherwise be unable to scrape together a nest egg do just that, Yale economics professor Robert Shiller noted in a New York Times editorial over the weekend. But the Swiss do just fine amassing household savings and have a much lower homeownership rate, Shiller noted, arguing that it’s time to take away some of the “enormous subsidy to homeownership” provided by Uncle Sam — such as the mortgage interest deduction.

Not surprisingly, National Association of Realtors Chief Economist Lawrence Yun believes that Shiller has missed some “obvious facts.”The housing crisis, Yun notes, “arose from easy lending,” and “did not happen because of the mortgage interest deduction.” Eliminating the mortgage interest deduction “will result in home price declines of about 15 percent,” Yun claims.

Shiller might be willing to concede some or all of those claims. His main point is less about the role housing subsidies played in creating the conditions that led to the downturn, and more to do with whether there are societal drawbacks to relying so heavily on homeownership as a mechanism for household savings.

There are, Shiller notes, advantages to being a renter in today’s economy. Renters, he says, “are more mobile. That means they are more likely to accept jobs in another city, or even on the other side of a large metropolis.” –

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