Why I think people should own homes, not stocks.

James Altucher wrote Why I Am Never Going to Own a Home Again citing a list of downsides to homeownership.  While we normally agree, especially on topics such as why kids shouldn't need to go to college, I have to disagree with the self-motivated reasons he gave in his post if trying to win-over Middle America.

I think:

• Homes should not be considered financial investments.
• Homes should be considered safety nets.  If citizens are buying prudently (ie - not over-spending, not over-leveraging, purchasing quality, etc.), and paying aggressively (in lieu of putting extra cash into the stock market), a few weeks or months of unemployment shouldn't drastically affect their living condition.
• Mortgages are cheap, fixed-rate leverage, against an asset that will protect them for life provided they spend prudently, and maintain their property.
• Most Americans are not as financially savvy, or as change-compulsive as Mr. Altucher.
• The complete vertical integration of the markets into daily life equate renters to "putting all their eggs in one basket" if they are not savers.  Most Americans are not savers.  Purchasers lock-in their stead at one point in time.  Homeownership and aggressive principal reduction is a put option on the Economy.
• We agree that the "tax incentive" citation to homeownership is misguided, and so is the notion that one should contribute to RSA's for the taxable benefits.  RSA's are also illiquid and saddled with penalty expenses, two other negative points Altucher makes.
• We agree that closing costs are inane, but they are also a one time time expense, and his argument that tax deductions for mortgage interest are nominal don't square with his argument against closing costs.
• If you do want to move, you're not trapped, you can rent to one of the swelling ranks of Altuchers out there, let the property management company mind your place and your people, and then rent in the new place.  If anything happens, you've got a place to go on short-notice.
• "Stress."  What people went through during the Dot Com Bust and in 2008 didn't result from homeownership, but from living beyond their means.

Ultimately, both sides of this argument resemble a discussion about leasing vs. buying automobiles.  There are merits to each, but the deciding factors should be the length of assumed usage, as well as the amount of care one has toward their things.  In my opinion, James's discussion highlights the downsides to homeownership over a short time frame, and for someone that likes to rag their shit out.  It should also be noted that I deduce from his piece that he is a saver, so we may be making opposite sides of the same point.  If this is the case, the real point is that Americans need to revert to saving, by whatever means they choose to do so, and by reducing their mortgage principal they do not have the potential to "lose money" but to guarantee a certain way of life.  I believe that Americans should view homeownership as a long term investment in themselves, not in their wallets.  Doing so inherently reduces "beta."