An enormous entitlement in the tax code props up home prices

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Two years ago, the couple bought a new home. Set on a half-acre lot that backs up to conservation land in Milton, Mass., the 2,350-square-foot split-level has four bedrooms, three bathrooms, an open-concept kitchen and dining area, a finished basement, hardwood floors and beautiful touches throughout, like the Tennessee marble fireplace and hearth. It cost $665,000. “This is the nicest house I’ve ever lived in,” Asare told me.

Asare and Jean-Charles have four children and earn roughly $290,000 a year, which puts them in the top 5 percent of household incomes in the country. After renting for the first years of their marriage, they participated in a home buyers’ program administered by the nonprofit Neighborhood Assistance Corporation of America. The program allowed Asare and Jean-Charles to purchase their first home in 2009 for $360,000 with a 10 percent down payment, half of what is typically required. In 2015, they sold it for $430,000. There is a reason so many Americans choose to develop their net worth through homeownership: It is a proven wealth builder and savings compeller. The average homeowner boasts a net worth ($195,400) that is 36 times that of the average renter ($5,400)… More at NYT.

Home ownership is a hot topic in the UK as well with the next generation likely to struggle with the cost of flats and houses. As a relative of mine said, home ownership could be a temporary thing that only lasted for a few decades. Sadly he may be right.

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