Unpopular view: less people should own their homes and we should tax people on their primary residence. I presume that making it not subject to cap gains was intended to be a nice gesture to "the little guy" but in our market I think it hugely harms the lower-middle class /1

Owning your own home is an "unfairly" good investment due to these taxation rules. This makes it seem logical to put all your eggs in one basket (and it may very well be despite how risky it is).

This leads to increased demand from the middle class, and much higher prices. /2

Once the economy gets good enough that the lower-middle class can conceivably afford their own homes they have already been front run by everyone wealthier than them and end up purchasing these homes that are massively overpriced using far too much leverage. /3

The "black swan" economic events that lead to housing collapses are much more likely to occur in close proximity to when the lower-middle class can afford their first homes. Rather than having many years of equity paid down, they'll often just lose their home. /4

Now we have another collapse and upper-middle and upper-class people end up buying these homes for dirt cheap, renting to the lower-middle class and then next economic boom selling them back to the lower-middle class at an insane premium. /5

In reality I think it makes sense to have the tax treatment of owning vs renting be much closer to indifference. This would cause less of these boom/bust cycles and prevent wealthy people from having such a large competitive advantage on market timing. /6

People always talk about how important it is for someone to own their own home. I don't really think that's the case (and if it is the case it is mostly because of taxation) and think if prices moved more similarly to other asset classes it would be a much fairer ecosystem /7