Re-thinking American Dream Of Home Ownership

Read Joseph Gyourko's Article, "5 Myths About Home Sweet Homeownership"

The economic crisis shattered that dream for many, and made many other would-be home buyers reconsider. Joseph Gyourko of the University of Pennsylvania's Real Estate Center and Wilhelmina Leigh of the Joint Center for Political and Economic Studies discuss home ownership.

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NEAL CONAN, host:

This is TALK OF THE NATION. I'm Neal Conan, in Washington.

Owning your own home with a yard, a picket fence, maybe a front porch is a cornerstone of the American dream. And building equity in a split-level or a Cape Cod provided a path to the middle class, a way to finance college for the kids and build a nest egg for retirement. A home, realtors reminded us, would be the single-biggest investment we'd probably make in our lifetimes. One mortgage crisis later, and many people's dreams lie shuttered in foreclosure or in upside-down mortgages, which caused a lot of people to reconsider renting as more than a stop gap.

So should everyone own a home? If you're in the market, if you've decided not to buy, call and tell us why. Our phone number: 800-989-8255. Email us: talk@npr.org. You can also join the conversation on our Web site. That's at npr.org. Click on TALK OF THE NATION.

Later in the program, how to lose a cyber war. Defense analyst John Arquilla joins us. But first, should everyone own a home?

We begin with Joseph Gyourko. He directs the Real Estate Center at the University of Pennsylvania's Wharton School in Philadelphia, and joins us from the studio there. And thanks very much for being with us today.

Professor JOSEPH GYOURKO (Director, Real Estate Center, University of Pennsylvania's Wharton School): Thank you. My pleasure.

CONAN: So, mortgage rates are low, housing prices are falling in many places. The government is offering a significant first-time home buyer credit, $8,000. Is now a good time for anybody who wants to buy a house?

Prof. GYOURKO: It depends. Not everyone should own. Some of us should. I do, and I certainly think it was a good decision for me, but it depends. You shouldn't let mortgage interest rates drive your decision. It depends on whether the costs, you know, exceed the benefits of owning. And if they do, you should rent. There are number of costs, besides the fact that you have to pay on a mortgage, pay property taxes, heat your home, fix the roof if it starts to leak.

The other costs that I think are underappreciated by a lot of households have to do with mobility. Owning ties you down. It's an expensive asset, and people live in them for very long time periods of time to defray the costs of owning over a lot of years. And for a lot of people, like me, that's not a big cost because I'm on the wrong side of 50 now.

(Soundbite of laughter)

Prof. GYOURKO: My kids are in the school system that I want them to be in, and I have a very stable job. But if you're young, if you might need to move to opportunity or need to change location to get a better school quality match, maybe you shouldn't be owning because very expensive round trips cost you six to nine percent of house value, just to sell a home and buy a new one. So I think there are a lot of unappreciated costs with owning that would lead some people, if they thought about them more seriously, not to own.

CONAN: But isn't housing a great long-term investment?

Prof. GYOURKO: You know, it is actually not a particularly great long-term investment. The RIOs(ph) are after inflation. So, adjust for inflation, average return in the United States since 1975 has been about one percent a year. So, it's - that's not zero. It's positive. That's a good thing. But it's not a particularly great way to build wealth. You would have done a lot better in a -even a one-year treasury bond index over that period of time, quite frankly. So, financially, no. It's not nearly as good as people think it is.

CONAN: But isn't it the great psychological investment? People have a stake in their community. They're better citizens.

Prof. GYOURKO: Yeah, that I agree with. I think there - and also in a different way then the one you mentioned, I certainly think people have a stake in their community. And I think that can make for better communities. I also think people just like the control of owning their own home. And that's a - there's a pride of ownership, and that's real. So I'm not saying there aren't benefits. There are. And you just mentioned a few. But there are costs. And housing's an expensive, durable good, and durable goods are costly to maintain. And sometimes those costs can make it such that you actually should know.

CONAN: Some people also say, you know, paying rent is just, well, it's just dropping money down a rat hole. You're not getting any return on that money.

Prof. GYOURKO: That - well, there is that myth out there that all my realtor friends tell me all the time...

(Soundbite of laughter)

Prof. GYOURKO: ...that owning saves on your rent. It actually doesn't. And if you think about it, imagine that you could either rent your house or own your house. And if you rented it from some landlord, you would have to write a rent check, and the landlord would use that rent check to cover the costs of owning, to pay for his or her mortgage, the property taxes, the heating bill and the like. All right? Now, if you own the house yourself, you obviously don't write yourself a rent check, because that's a waste of paper.

But you still have to cover all the costs of occupying the house. You just have to do it without a rent check. So, I sort of tell my non-realtor friends: Remember, the landlord you're stiffing when you don't pay yourself a rent check as an owner is yourself. So, you can't save. The operating costs are the same whether you rent or own the house.

CONAN: We're speaking with Joseph Gyourko, the chair of the Real Estate department and director of the Zell/Lurie Real Estate Center at the University of Pennsylvania's Wharton School - 800-989-8255. Email us: talk@npr.org. Whether you're, well, thinking about buying at this low point in the market or thinking, well, maybe renting is the way to go, if you've changed your mind, tell us why. And let's see if we can get a caller on the line. And we'll start with Bob, Bob with us from St. Paul.

BOB (Caller): Hey, thanks much.

CONAN: Sure.

BOB: Yes. I'm a homeowner, and within about five years, we'll have paid off my mortgage.

CONAN: Congratulations.

BOB: Thank you.

(Soundbite of laughter)

BOB: However, if I had it to do all over again, I probably would do much as your guest was suggesting and just pay less for rent and invest the difference in some decent investment instruments.

CONAN: I see - even though you're now at the cusp of being free and clear.

BOB: Well, he mentioned control, and I guess - my question is - I always wondered whether it's the control of the leaky roof which costs a lot to replace, or the outdated plumbing.

(Soundbite of laughter)

CONAN: You have a choice.

BOB: Yeah.

CONAN: So, all things considered, you would have - are there opportunities that owning this house has cost you that you've said, well, maybe I would have taken that job in sunny Florida, but, you know, I've got this house here in�

BOB: Exactly what you said, except maybe Arizona.

CONAN: Arizona.

BOB: And, I mean, the fact that I'm married and my wife likes winter lot more than I do, but every year about this time I think, well, if I was renting, I could say badda bing (unintelligible).

CONAN: And�

BOB: (unintelligible) down in Prescott.

CONAN: Well, and I can guarantee there's a lot of houses for sale in Prescott.

(Soundbite of laughter)

BOB: Hey, thanks.

CONAN: Bob, thanks very much for the call, and good luck to you. Bye-bye. Well, there's an endorsement of your thought that maybe you ought to consider renting from somebody who's somebody at the other end of the telescope.

Prof. GYOURKO: Every now and then, you find people like that. Most people still, I think, think owning is inherently better. And it is for lot of people, just not for everybody.

CONAN: Let's if we can get another caller in. This is Brian, Brian with us from Chicago.

BRIAN (Caller): Yeah. How are you doing?

CONAN: Go ahead.

BRIAN: Yeah, I was telling your screener, I'm a firm advocate of re-ruralfication(ph) of the country, specifically getting, you know, owners to get out of the cities and whatnot and get in some of these smaller towns. We're in a, you know, small town fairly near South Bend but far enough out that we're really rural. We're not even a suburb of any stretch of the imagination. And, you know, we bought small, you know, a $1,200(ph) house that was really nice, needed just a little fixing up. We got it on an auction sale for $40,000. The same house, you know, inside Chicago or South Bend or any around the area, you know, you're looking at 200, $250,000. And it just - it dumbfounds me that, you know, all the troubles that you have within that city structure, the pollution and crime and stuff - well, why people aren't moving away from that more and getting the businesses to come more out?

CONAN: But how long is your commute every day?

BRIAN: Well, I don't work in the city. The point is, is I even took a job that didn't require me to be in the city. I mean - I don't even - I cut the ties altogether.

CONAN: I see. So you work from home or you work in this little town near South Bend.

BRIAN: Exactly, exactly. And I had a nice discussion/argument with another guy that lives in Chicago, and we were comparing the things about, you know, the benefits of - you know, I have an acre of land. I'm out in the middle of nowhere, good, fresh air. And basically, the argument came down to with his, you know, quadruple cost of his home, well, I get to do all the things I can. In Chicago, there's so many things.

I pointed out just the interest difference alone, I can rent a limo and come into the weekend, you know, Saturday and Sunday, every weekend and go to three or four difference places and have the limo ride back just in the interest savings alone.

CONAN: Well, if you have the luxury of being able to work out in the countryside, I think you've got quite an idea there, Brian.

BRIAN: Well, I'd like to see the employers maybe, you know, pull out of the cities more and start setting up in smaller towns.

CONAN: Well, that might be interesting. Thanks very much for the call, appreciate it.

BRIAN: Sure, sure.

CONAN: Bye-bye. That's also interesting. Obviously, prices are way lower out in the countryside. Here's an email we have from Crystal(ph) in San Francisco: I'm a 29-year-old teacher living in the Bay Area. Being raised in an economically conservative household, I was taught you should only own a home when you can save 20 percent to put down. That ensures if you have enough income to cover the extra costs that come with home ownership.

Many of my friends have used inheritances or gifts to pay for their down payment, but that does not ensure that you can cover any more than your mortgage payments. So on my teacher's salary and modest savings, no, home ownership is not for me.

And that's - I know that's a calculation you've gone through, too.

Prof. GYOURKO: That is exactly right. I think it's risky. You know, if you have to spend almost all of your after-tax income on your house: one, if something bad happens to you, either health-wise or job-wise, you can be in real trouble, and you don't get to do much else than pay your mortgage.

So I think particularly, that's the young type of household, maybe modest or lower income I was talking about for whom, you know, accessing home ownership may really restrict what they can do in their lives, as a general rule.

CONAN: And if you're paying less than 20 percent, if you've got a - somehow, you're either paying mortgage insurance, which is onerous, or there's some kind of balloon payment in your future.

Prof. GYOURKO: Probably.

CONAN: Yeah.

Prof. GYOURKO: That's right. It's just risky. High leverage is risky, even on housing, just like it is if you were buying stocks with high leverage.

CONAN: Here's an email from Fred in Buffalo: Although we'd like to own our own home someday, my wife and I find a certain security in the fact that we're not responsible for things like fixing a broken furnace or a roof. We know that the rent will predictably be the same price every month, and that we won't have any unpleasant surprises that will overwhelm us. And I guess that's psychological security of another kind.

Prof. GYOURKO: It is, although one word of caution there. Rent is not always predictable. There's some very good research by one of my colleagues at the Wharton School, Todd Sinai, which shows that rent volatility is one of the things - one of the risks renters have to bear that owners actually don't have to bear, they're hedged against. So, again, it's a cost-benefit - it's a trade off.

CONAN: And there have been cases where, indeed, the landlord has gone, been foreclosed. And, of course, then everything's up in the air, and who knows what leases are worth what. They're not even worth the paper they're printed on.

Prof. GYOURKO: Exactly, on some homes that are being rented out. Yes.

CONAN: We're talking about whether or not everybody should own a home. If you're in the market, if you've decided not to buy, call and tell us why: 800-989-8255. Email us: talk@npr.org. Up next, we'll consider what the housing bust means for the long-time gap in home ownership between minorities and white Americans. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.

(Soundbite of music)

CONAN: This is TALK OF THE NATION. I'm Neal Conan, in Washington. With the collapse of the housing market, more people fall behind on mortgages. More face foreclosure, and more are just walking away from their houses, which are now worth less than they owe - all of which has helped turn the American dream of ownership on its head. Many now argue the American is better leased.

So should everyone own a home? If you're in the market or if you've decided not to buy, call and tell us why: 800-989-8255. Email us: talk@npr.org. You can also join the conversation on our Web site. That's at npr.org. Click on TALK OF THE NATION.

CONAN: Our guest is Joseph Gyourko. He directs the Real Estate Department at the University of Pennsylvania's Wharton School and wrote a piece in the Washington Post last month about five myths about home-sweet-home ownership.

Let's see if we can get another caller on the line. Let's go to - excuse me, let's go to Josh, Josh with us from Woodburn in Oregon.

(Soundbite of baby shouting)

JOSH (Caller): Hi, yeah. I'm a stay-at-home dad, a renter, and my wife is a teacher with a master's degree. And, you know, I've got two small kids. And in the last four or five years, everybody's trying to get us to buy a house. It was just such a great idea. And now I'm really glad we didn't, because once the rates sort of adjusted up, I don't know what we would have done.

CONAN: Yeah, because you would have gotten one of those adjustable-rate mortgages that looked so attractive, at least at first.

JOSH: Yeah, exactly. And, you know, I think everybody should be able to own a home. I think that's reasonable. And, you know, most of my neighbors are Latin-American, and, you know, they say, for example, in Mexico, you know, houses don't cost hundreds of thousands of dollars. You know, people build houses maybe one room at a time because everybody should be able to own a home. It's ridiculous for these prices to be so sky-high.

CONAN: Well, Josh, it sounds like you've got a little - a couple of assets running around that need attention.

JOSH: Yup.

CONAN: All right, go take care of them. Joseph Gyourko, just wondering about that point he made. How does the United States' rate of home ownership compare with other countries?

Prof. GYOURKO: It's actually pretty high. At the peak of the housing boom, we got about 69 percent of households owned. We're down in the - you know, close to 67 percent now. There are countries that have higher ownership rates -Spain, for instance. But Germany, Austria, Denmark are in the low 40 percent ownership range.

And so home ownership is accessible to most households in the United States, and certainly we compare favorably on those grounds globally.

CONAN: While home ownership long a dream for many, also, it has been out of reach for many lower-income Americans and often for people of color. According to the U.S. Census Bureau, three-quarters of white Americans owned their homes in 2007, compared with less than half of African-Americans. Wilhelmina Leigh studies issues around the gap in home ownership, and she joins us now here in Studio 3A. Thanks very much for coming in today.

Ms. WILHELMINA LEIGH (Senior Research Associate, Joint Center for Political and Economic Studies): You're very welcome.

CONAN: And Wilhelmina Leigh is a senior research associate with the Joint Center for Political and Economic Studies. Minorities have been historically lagging behind whites in home ownership. That gap had actually narrowed since the 1990s before the housing crisis started. Does the collapse of the housing market mean the end of the dream for people who had hoped to get their own home?

Ms. LEIGH: I don't know whether it means the end, but it means that we're going to take a whole lot of steps back before we take any more steps forward. And I also think that we still have a very long way, and we always have had a very long way to go in terms of trying to close that gap.

Just to give you one example, the white home ownership rate in 1940 was about 46 percent, and it was the year 2000 before the black home ownership rate reached that level. So that's a clear illustration of the challenge and the huge gap.

CONAN: And a lot of people say, when they look at disparities between white Americans and minorities - particularly African-Americans - they say: Measure wealth, don't measure income, necessarily. And home ownership has always been a big part of wealth.

Ms. LEIGH: It certainly has, and I think it always will be, at least under the current structure. And what I mean by that is people think of owning a home as a very easy-to-understand financial asset or a way to acquire wealth. And it's probably the easiest to understand because it's very visible, and you take pride in it. You're glad to show people around your home and your lands and, you know, those sorts of things.

Other assets are much less readily understood, and things like stocks, mutual funds, CDs, bonds, even savings accounts for some people are sort of foreign. And as long as those assets stay foreign to many, many people, there's still going to be an interest and a push toward owning a home as a way to move forward, though actually, if people were to get a greater understanding and think of some of those other assets as ways to build wealth, they could perhaps acquire enough wealth with those assets that they could be able to buy a house and do quite well.

CONAN: And cover that 20 percent...

Ms. LEIGH: Exactly.

CONAN: ...drop, as soon as you try to put the down payment down. However, financial education is a problem not just for African-Americans, but for everybody.

Ms. LEIGH: It certainly is. I mean, the fact that people don't understand what the other instruments are, and when they have tried to get an understanding haven't always been given, you know, the correct information, they've been steered in certain ways, it's made it harder for lots of people to get an understanding of what it is they could put their funds into to build wealth.

CONAN: As far you understand it, have African-Americans been disproportionately affected by this housing crisis?

Ms. LEIGH: Yes. And one of the main reasons is most of the - or many, many or most. I don't know exactly which the best adjective is, but many or most of the subprime loans that were made were made by mortgage brokers.

Mortgage brokers operated in areas, by and large, where there were not banks or credit unions and where also people lived who didn't understand the mainstream processes of, you know, how do you get a loan, how do you open a bank account, things of that...

CONAN: This was their first time.

Ms. LEIGH: Yeah, so they just didn't have a clear understanding. And the brokers stepped in and played that middleman role - and got profits for it, of course. But they played that middleman role, and the neighborhoods that are generally characterized this way are historically lower-income neighborhoods, neighborhoods where people of color live, neighborhoods that are racially segregated and often isolated from other areas or cities.

So yes, based on the way the subprime mortgages were made, by and large, I would have to say for sure that people of color and lower-income people are the ones who are bearing the brunt of this.

CONAN: I wanted to ask Joseph Gyourko to come in here. And is the calculation different for people with lower incomes and for people who may want to be buying houses in areas of the city that are not - well, housing might be cheaper there, but it's less likely they will accrue in value.

Prof. GYOURKO: Well, we actually don't know the answer to the second question. There's been no study, to my knowledge, of whether house price appreciation in certain areas with high minority household shares, do they appreciate more slowly than in other areas?

We actually don't know. I think we think the answer is yes, but we don't know, and we need to figure this out. And I couldn't agree more with Wilhelmina. Unfortunately, I think a lot of the riskier mortgages disproportionately went to minority households, and we're going to take a step backwards in the home ownership rate there. I think it's unavoidable.

CONAN: And it feels like people are being whipsawed again.

Ms. LEIGH: Mm-hmm. Mm-hmm. Once again.

CONAN: Once again. Here's an email we have, this from Gary in Levine(ph), I think that is, Arizona. Your guest made some very valid points regarding costs of owning a home. However, I disagree with one. He said owning a house is not a particularly good investment, since you can expect an average of only one person return per year. If you compare that to other pure investments, perhaps true. However, if you compare that one percent return to rent, on which the return is zero, it's quite good. You must have shelter, and as he pointed out, you pay operational costs whether you rent or own. So that one percent of return on the cost of shelter, not a bad investment. Joseph Gyourko, are you being called out there?

Prof. GYOURKO: I think he's got the economics wrong. Remember, you had to make an equity down payment, and you could've made that equity down payment, you know, and invested in some other asset and earned a return. So if you include that return, which you could have reached, it's not - he's not right, unfortunately.

CONAN: OK, all right. Well, mathematics is never easy, is it?

Prof. GYOURKO: Yeah, no. And this one's tricky on housing, because people forget that they could have done something else with their home equity. They could have earned some other return.

CONAN: Let's talk with Terik(ph), Terik with us from Boston.

TERIK (Caller): Hi, how are you?

CONAN: Very well, thanks. Actually, I've got a cold, but I'll live through it.

(Soundbite of laughter)

TERIK: I'm actually moving down to North Carolina for a cardiology fellowship at Duke with my wife, and we're both from the Northeast. We both have a lot of education debt, and the prevailing wisdom seems to be that when you move down there, you buy a house. And it's quite stressful to think of $200,000 more in debt after med school loans, and she's got business school loans. So I was curious just to see what you would suggest.

CONAN: Well, I'm not sure we can solve your dilemma here on the radio. But Wilhelmina Leigh, when you look at that line in the contract to buy the house and say this is the total amount you're going to be paying over the 30 years, it's a sobering number.

Ms. LEIGH: It's very sobering. In fact, the moment that I felt most poor in my entire life was after I had taken money that I had saved out of the bank to put down on a house. And I was putting down 10 percent, which wasn't that huge a sum.

CONAN: Mm-hmm.

Ms. LEIGH: But back when I did it, it seemed like, oh my god, you know, and also for the caller, it depends on how long you're going to be in your residency site. You know, if you�

TERIK(PH): That would be five years.

Ms. LEIGH: Five years? You know, that's a real hard one because it really depends on the way the market goes and it depends on whether you think you're going to stay in that area, because if it's - five years goes by real quick. And once you put money down, you're going to have to spend money to sell it too. And we don't know what's going to happen to the market.

CONAN: Five years, (unintelligible) people, young people never believed that. But debt on debt, Joseph Gyourko, he's got all that education debt.

Prof. GYOURKO: I understand. You just have to understand that leverage is risky. You seemed to sense it correctly. I'm not a financial advisor. My advice on housing is own if you really like your home. And if you don't, don't do it. Renting is not the end of the world. There's lots of good rental stock out there.

So if you're really nervous about the debt, rent. And own if you find a house that you just love and is special because you'll get a lot of enjoyment out of it. That's my view on owning. You should own if you're going to really enjoy it and value living in your house. Otherwise, rent.

CONAN: Good luck, Terik.

Here's an email from Cindy and Tom in Grand Rapids. Four years ago, about 10 minutes before the housing market collapsed, we sold our house in Grand Rapids. We moved to Detroit for a job and rented a great place right on the Detroit River. Well, the auto industry spit us out and now we're back in Grand Rapids. We are very happy that we rented. We would be stuck with an unsellable place back in Detroit with very little equity and very few options.

And again, that goes back to your point earlier, Joseph Gyourko. You could wind up having - needing to move and not being able to.

Prof. GYOURKO: That's exactly right. And nobody should think they can time the market. I certainly can't. Doesn't like - doesn't sound like Wilhelmina thinks she can either. And I don't think anyone else should.

CONAN: We're talking about the market for rentals in the midst of the housing crisis. The housing prices could be very attractive. Nevertheless, there are reasons you may want to reconsider your definition of the American dream.

You're listening to TALK OF THE NATION from NPR News.

And let me reintroduce our guests. Wilhelmina Leigh, a senior research associate of the Joint Center for Political and Economic Studies, with us here in Studio 3A. And Joseph Gyourko, who's the chair of the Real Estate Department and director of the Zell/Lurie Real Estate Center at the University of Pennsylvania's Wharton School, with us from a studio at that institution.

And let's see if we can go next to - this is Mike, Mike with us from Fenton in Michigan.

MIKE (Caller): Hello.

CONAN: Hi.

MIKE: I've been listening, and boy, I sure - I think I've been hearing some great stuff. We were homeowners. We were foreclosed on. A middle-class working family, really got caught up in trying to just, you know, get the extra for your money. We bought probably three years before the market fell. So it became so attractive, we thought, well, we could really improve our lives by doing so. And I agree with what was said just a few minutes ago, about if you love your home. We bought our home thinking we could improve it and so on and so forth, but we went to improve it, the market fell so there weren't - you know, you get talked into all these - well, you can remortgage or refinance.

CONAN: You flip it, yeah.

MIKE: And so then we ended up with just a lame duck, really. We now rent, and once we got over the loss of pride in losing our home, man, we really - the benefits of renting right now - for anybody that wants to rent, we found that we really negotiated our own deal. We worked with people that were, you know, upside down on their houses. And...

CONAN: Hmm.

MIKE: ...you know, it's just, it's been a real relief, that there seem to be -when we went to rent, there was quite a big market of people that were upside down and, you know, not willing to - they do not want to lose their homes. And so we ended up renting one of those.

CONAN: Oh, it's so interesting. So you - it's almost a renter's market.

MIKE: Yeah. And we're hoping it stays that way. Unfortunately...

(Soundbite of laughter)

MIKE: Again, when they said earlier about how that that fluctuates, you know, we wonder, you know, it's a rental situation, you know, you sign a year lease.

CONAN: Sure.

MIKE: At the end of the year, once this becomes more and more popular, it seems like, you know, we don't know where that rent is going to go the next year, but...

CONAN: Right. And moving costs a bundle no matter when you do it. So..

MIKE: Right, right. But we feel - you know, like I said, once we - we just - it seems to be with the (unintelligible) you know, I work at General Motors and we went through a lot of layoffs. And it just seems like I'm amongst a lot of fellows in the same spot. And it was also said about different housing markets. And I live in Fenton. Again, and it's a real - a good solid middle-class housing, I guess, market, what you call it. But - and boy, the houses were going foreclosed around us, I mean, just left and right. And what's happening...

CONAN: And that can really change a neighborhood too. Anyway, Mike, I want to give somebody else a chance, okay?

MIKE: Okay.

CONAN: Thanks very much for the phone call. I wanted to get to some emails. This is from Sue in Nome, Alaska. We own our own home. It's been good to us, but maintenance and improvements take a lot of time and extra cash. A lot of sacrifice in Northern Alaska community with extremely short summers. Therefore I find myself warning friends who are thinking about buying their own home, particularly Alaska native friends who still have strong ties to their village, that being a homeowner means your home owns you.

Well, that's a way to put it. And this is from Mark. I'm a homeowner in Salt Lake, Utah. Also own rental units. We encourage our tenants to call us when anything needs attention. That way we can resolve issues the way we want to and before they get to be bigger issues. However, every time they call, I find myself thinking what a great life they have. Every time something goes wrong, they simply pick up the phone and I come running. I am not sure if all of them realize how good they have it compared with ownership. However, my residents of rental properties make up a significant part of my wealth and have proven to be my best investment. So there you have two sides of the coin. So are you happy at the end that you bought your house?

Ms. LEIGH: Yes. And I'd say the reason is where I bought it. I bought a house very much underpriced because it was in what was considered to be a bad neighborhood.

CONAN: Mm-hmm

Ms. LEIGH: And it was a bad neighborhood. And I bought it 30 years ago. And I'm about the only person who is still on the block who was on there when I moved in. And house values have more than - I mean eight times.

CONAN: Even given this recent unpleasantness.

Ms. LEIGH: Yeah. I mean - so I've earned a lot. But - and I bought it mainly because of where it was. It was near where I knew I was going to work and wanted to be. So yes, I'm very happy.

CONAN: A lesson: location, location, location.

Ms. LEIGH: Yes. Yes.

CONAN: Wilhelmina Leigh, a senior research associate for the Joint Center for Political and Economic Studies. She was kind enough to join us here in Studio 3A.

Thanks very much for your time today.

Ms. LEIGH: You're very welcome.

CONAN: And Joseph Gyourko, thank you for talking with us.

Prof. GYOURKO: My pleasure.

CONAN: Joseph Gyourko at the University of Pennsylvania's Wharton School.

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