Your House Is Not Just an Investment

It takes approximately thirty-eight seconds for Miranda Lambert to make me cry. Her 2010 country ballad “The House That Built Me” is a tearjerker from the second line: “Ma’am, I know you don’t know me from Adam / But these hand prints on the front steps are mine.”

Lambert herself has told reporters she “just started bawling” the moment she heard the track, written by Tom Douglas and Allen Shamblin, which tells the story of a woman returning to her childhood home and asking the current owner, a total stranger, to let her walk through. Lambert was moved by uncanny resemblances in the song to her own childhood, resemblances that happened to resonate with millions of listeners too. “The House That Built Me” topped country charts for weeks and ultimately earned Lambert a Grammy. The hook is about identity rooted in place—discovering who she is by examining the physical structure where she was raised.

It’s hard to imagine Lambert’s song landing just a few decades earlier: The whole concept only makes sense in a world where it is normal for parents to move at least once, if not several times, by the time their children reach adulthood. Interestingly, this trend toward increased motion has not diminished the psychological draw of the childhood home. “If home is ‘where the heart is’ or ‘wherever I’m with you,’ I should be fine with my mom moving anywhere,” reflected one Atlantic writer, struggling to understand her affinity for her childhood home.

Instead, any mention of a future sale prompts an ache akin to the homesickness I felt as a kid at summer camp—except that now I ache for my future self. I imagine her standing outside that suburban New Jersey house, pacing back and forth, insisting that some piece of her remains in this one edifice on a certain corner of a specific street, even though she hasn’t lived there for decades.

Perhaps one reason childhood home sentiment is high (see, for example, the “Nancy Meyers” and “’90s mom” trends in popular home decor) is that actual home-like homes are disappearing, as houses become primarily another form of investment, and a dwelling place secondarily. A house has always been a kind of investment, but in recent decades, real estate ownership has become a particularly attractive form of wealth building, as one of the most reliable ways to increase net worth. Along the way, the average suburban home changed from something modest and functional to structures as extravagant in square footage as they are devoid of color. For most buyers, less character is understood to mean higher potential resale value. A blank slate is more readily sold.

That the value of a home will only increase, or appreciate, over time is as unquestioned as Newton’s laws of physics. With few exceptions—most notably the 2008 housing market crash—home prices have only increased since 1975, when the U.S. government began to keep track. Inflation and the invention of the mortgage-backed security (MBS) have done much to propel this trajectory.

When the New Deal era Federal National Mortgage Association (“Fannie Mae”) created an offshoot called the Government National Mortgage Association (“Ginnie Mae”) in 1968, the goal was to further broaden the pool of Americans who could qualify for a home loan by reducing the financial risk of such loans for local banks. To do this, Ginnie Mae produced the MBS: a mechanism by which banks could bundle loans and sell them to investors, thus acting as facilitators for home purchases while passing along the financial risk. Banks got a kickback from the investor for their work as facilitators, meaning they had an incentive not only to sell worse mortgages to investors, but also to enlist more home buyers. The trickle-down from this decision, which few scholars dispute, is that once banks could qualify a whole new demographic of Americans to acquire substantial debt, housing demand and individual home prices began to rise much higher and faster than ever before in American history. In this way, it was not unlike what happened to the cost of college after the introduction of government subsidies.

There is more to the story of increased home appreciation after the late twentieth century, including inflation and immigration, but the introduction of the mortgage-backed security was a paradigm shift. It allowed more Americans to take on significant debt, and banks to qualify countless more risky loans, because of the transferred liability and profit incentives. Notably, it was this mechanism—and the demand it created at the bank level for more and riskier mortgages—that created the housing bubble of 2008.

There is a tension between the house-that-built-me and the house-as-investment. The purely economic mind reduces the question to numbers: The home should always go to the highest bidder, even if that means young families continue to rent while the house goes to a Californian for whom every property east of Bakersfield is a basement bargain. If the home is an investment, parents should not allow their children to put handprints in the wet cement steps. If a home is a wealth-building tool first, paint over the pencil marks on the wall where a father once measured the kids’ heights, year on year, or consider not making any at all. 

Yet, it would be strange to say that a home was ever not an investment, or that it should not be. The whole concept of “home,” the unique physical location of a family’s formation, is braided tightly with the idea of building the future, whether that is the long view of generations rising up to call you blessed, or the more immediate view of a kitchen garden harvest. Building wealth has a place in that future, and not an irrelevant one. The difference is in understanding the word “investment”: whether wealth is an end in itself or one of many means to another end. The telos of a house, for a Christian, is the people gathered within it; home value appreciation may bless the family and the generations that follow, but not if it comes at the expense of memories, character marks, and the general mess of tradition and culture that shapes both the house and its residents.

Lambert’s song is no mere sentimentalism. The physical structure of a home does indeed shape those who live in it, and likewise it is impossible to live in a house without leaving marks. This is a reason to think deeply about how the home is shaped, and what it is oriented around, both physically and otherwise. A generation built by the house of maximizing investment returns is not, if the reader will forgive the phrase, a worthy investment.