Canada's Housing Bubble

Apr 07, 2010 David Pett network.nationalpost.com

You might think that the popping of one of the greatest housing bubbles in history would have changed attitudes toward real estate. But not so, according to Fannie Mae’s National Housing Survey of attitudes in the United States.

Felix Salmon of Reuters can scarcely believe his eyes as he surveys the evidence, which, among other things, finds that the vast majority of Americans still firmly believe that a high level of home ownership is important to the economy.

“This is horribly misguided..,” notes Salmon. “Homeownership is, if anything a drag on the economy, since it funnels resources into unproductive overconsumption and helps to impede labor mobility. There is absolutely no reason to believe that countries with high levels of homeownership, like the U.S., have better economies than those with low levels of homeownership, like Germany.”

The survey also discovers that most Americans believe that homeownership is just as safe as putting money into a savings account—and safer than buying government bonds. It is as if the entire housing bubble never happened. Which raises the question: could it all happen again?

See also: Survey Explain Why We're Doomed To Housing Bubble After Housing Bubble After Housing Bubble