Home "Ownership"

John McCain made a statement today that is worth breaking down, as it is core to an argument about home "ownership" that I often make. In regards to the GSEs (Fannie and Freddie):

"They will not fail. We cannot allow them to fail. They are vital to Americans' ability to own their own homes and we will do what's necessary to make sure that they continue that function."

Who really owns a home when a bank holds a loan equal to the value of the home? Why is the government pushing home ownership so hard? Does it really benefit the average home owner? If you really look at home ownership and the costs associated with it over historical averages, the costs of renting vs. owning are basically a wash. When you factor in transaction costs, interest, taxes, insurance, maintenance, etc... it barely outpeforms the historical 4% increase in the value of the home each year. And that's IF and a big IF you stay in the home for at a minimum of 5-10 years. The transaction costs of buying and selling a home is about 20% of the value of the home which takes almost 4-5 years in a typical stable market to earn. That doesn't include additional costs of maintenance, etc... That's a pretty big risk to take for an average middle-class american considering most are living paycheck to paycheck and any significant life change (loss of job, injury, health problem, kids, etc...) would jeopardize their ability to make payments. If on the other hand, that same person was renting a less costly home and saving the difference, this person (family) would be much better prepared to adjust to life changes.

Just a thought when you step back and really think about what's best for "we the people". We the people need to start living within our means, saving money for retirement, saving money for emergencies and generally taking better care fiscally. Cramming homeownership down consumer's throats through relentless promotion and easy access to credit has only caused homes to become less affordable and more of a financial risk to the general public. In my opinion, this will go down as one of the greatest tradgedies to ever take place in the US. In many ways this will far surpass the Great Depression in the pure level of destruction of home ownership in the US.