Ramit Sethi argues that the U.S. housing system, built on 30-year mortgages and government subsidies, locks people into one location and limits career mobility. Homeownership may actually restrict financial freedom rather than create it, benefiting the real estate industry more than the homeowner.
How many people do I know who tell me, "My number one goal with money is financial freedom," and then they spend 140% of their net worth on a 30-year mortgage, geographically locking them down in one place so they cannot move to get a better career, change their school district, or anything like that? That's not financial freedom. It might actually be the opposite. Homeownership is not just something that your parents tell you about. It is actually officially encouraged by the government. Homeownership in America is highly subsidized. We have things like 30-year fixed mortgages, which are not the case in other countries. So there is a structural incentive for you to buy a house. Now, back in the day, there was this kind of idea of, hey, we'd like to create strong community roots. But over time, that is not what happens now. The fact is that today the real estate industry is one of the biggest industries in America. In fact, look at the amount that the real estate industry spends on lobbying. It is huge. Do you know where all this money's being made? It's from you.
