Homeownership still a cornerstone of American Dream

To the editor:

I was very upset at Joseph Gyourko's Nov. 18 commentary headlined, "Five myths about homeownership." Mr. Gyourko is chairman of the real estate department at the University of Pennsylvania's Wharton School. With those credentials, he should not be misleading the public and discouraging people from getting into homeownership.

Mr. Gyourko disputes the "myth" that housing is a great long-term investment by pointing out that between 1975 and 2008, housing appreciated by only 1 percent per year, as compared to the higher appreciation of the stock market. These numbers are misleading because the housing market is in a huge slump at this time. If he had used 1975 to 2005, the numbers would have been dramatically different.

Second, the comparison is apples and oranges because it is not comparing true return on investment. A person's true investment in a house is not the total value of the house, but only the initial down payment, closing costs and maintenance/repairs, whereas a person's investment in the stock market is 100 percent.

Mr. Gyourko disputes the "myth" that the homebuyer tax credit makes buying a house more affordable by pointing out that in areas where there is strong demand and limited supply of housing, these tax credits may result in bidding up the home prices. What is actually pushing up home prices in such areas is not the tax credits, but investors and other people with extra cash who want to grab up all the good deals out there today. The tax credits simply allow a new homeowner to level the playing field a bit.

Mr. Gyourko disputes the "myth" that homeownership is good for society because owners make better citizens by comparing homeownership rates in other countries. This is totally irrelevant. The fact is, and the numbers have proven it, that a homeowner is much less likely to default on his home loan, thereby reducing the number of foreclosures in our communities.

In addition, a homeowner is more likely to keep his property in good condition when compared to a renter. This is why many homeowner associations limit the number of investment properties in a community.

Mr. Gyourko disputes the "myth" that it's safe to buy a house with a very low down payment, by pointing out that such a situation will result in having less equity and the house would be more susceptible to becoming "upside down" in the event of a downturn in the market. While this is technically correct, the fact is that many people do not get into homeownership because they do not have the upfront money for the down payment and closing costs, even though they can comfortably afford the monthly costs. As long as the latter point is true, a homeowner should seek the lowest upfront costs possible. To guard against getting "upside down," a homeowner always has the option of making additional payments each month that would be credited toward the principal owed.

Finally, Mr. Gyourko disputes the "myth" that owning a home is cheaper than renting because you save on rent by pointing out that as a homeowner you have the additional costs of maintenance and repairs. What is not said is that the mortgage interest and property taxes a homeowner pays are tax deductible, whereas no portion of the rent is. Also, at the end, a homeowner has an asset he owns, whereas a renter doesn't.

I believe very much in the strength of this country to pull out of the deep recession in which we find ourselves today and to see better days tomorrow. Homeownership should still remain as a cornerstone of the American Dream.

Miguel Lugo

LAS VEGAS

Buying a vote?

To the editor:

I hope to see lots of coverage of Harry Reid's bribery of Sen. Mary Landrieu of Louisiana to secure her vote on the health care bill. Sly Harry slipped a provision in the bill that would give Louisiana $100 million for disaster relief. Mary has been undecided on her vote prior to this time.

The people of Nevada need to know how underhanded and manipulative Sen. Reid is and how carelessly he throws around our taxpayer dollars.

What has New Orleans been doing for the past four year? The city received lots of citizen donated money as well as federal funds. But the entitlement mentality lives on.

Pat Egan

LAS VEGAS

Health model

To the editor:

The health care plans being discussed in Congress don't seem to address the problems with our current system that cause high prices: not enough competition to lower rates, not enough doctors, malpractice lawsuits and the uninsured receiving care.

The overhaul proposal seems intent only on forcing everyone to participate in the current system, thereby spreading the costs but not keeping the ultimate costs in check.

I think the country should adopt a staggered system of care. The top level would be the care received under the current system. A middle and bottom level would be care based upon lower standards of care, perhaps adopting the systems and requirements for health care used in another country. This would increase the amount of people qualified to practice medicine and create more competition.

The lower levels of care could have limits on malpractice awards since people consciously decide to participate in those levels and assume some risk. The uninsured could receive care in the lowest level, but accident or crime victims could be treated in the top level.

As it stands now, people are leaving the country to receive affordable care. The one size fits all model is outdated and real change is needed.

Russell Cox

LAS VEGAS