Don’t Wait—Own It: Mike Munger on Why Homeownership Still Matters

In a housing market riddled with barriers—skyrocketing prices, restrictive zoning, and bureaucratic delays—the American dream of owning a home seems increasingly out of reach for young people. But according to economist and Duke University professor Dr. Mike Munger, the real mistake is waiting.

“There’s never going to be a right time,” Munger said during our recent conversation. “The best time to buy a house is a year ago. The next best time is now.”

This may sound like a cliché, but it’s grounded in economic truth. Munger, host of the podcast The Answer is Transaction Costs, brings both humor and hard-won wisdom to the subject. He argues that most people overestimate the risks of buying a home and underestimate the compounding benefits of owning one.

Homeownership as a Wealth-Building Strategy

At Personal Finance Reimagined (PFR), June is Homebuying Month, and the focus is on equipping first-time homebuyers—especially students and young professionals—with the decision-making frameworks to take that first step. Munger’s perspective complements this mission perfectly.

In my own teaching, I emphasize that the “toil and trouble” of buying a home—borrowing a phrase from Adam Smith—is often worth it. What we do at PFR is help students reduce that toil: by demystifying the financial process, reframing decisions, and giving them tools to evaluate risks with clarity, not fear.

Munger agrees. While recounting his own early experience of buying a house during the high-interest era of the early 1980s (when rates hit 14%), he acknowledged the risks—but also the payoff. “We sold it for $5,000 less than we paid, but even that experience set me up. Most of the time, if you can just find a way to get in and hold on, you’ll be OK.”

Why Waiting Doesn’t Work

One of the biggest behavioral pitfalls young buyers face is the illusion of perfect timing. Munger and I both cautioned against this.

Trying to time the housing market, I often tell my students, is like trying to catch a falling knife—you might get lucky, but you’ll probably get cut. Munger’s version? “Just get in. You’ll look up one day and think, ‘Wow, I’ve paid off a lot, and it’s worth more now.’ That’s the ladder to prosperity.”

Waiting, on the other hand, usually results in lost opportunity. The friction—what economists call transaction costs—builds. These can be financial (permits, fees, taxes) or psychological (fear, complexity, analysis paralysis). Over time, they accumulate and erode the very wealth you’re trying to build.

The Structural Barriers Behind the Crisis

While Munger encourages ownership, he doesn’t ignore the structural problems. In fact, he’s outspoken about the regulatory burdens that distort supply and inflate prices. From zoning laws to building codes, government-imposed transaction costs make it harder to construct affordable housing—especially in the places where it’s needed most.

This aligns with the work we do at PFR to help clients and students understand the broader context behind their financial decisions. It’s not just about down payments and credit scores—it’s also about public policy, local incentives, and how scarcity is often artificially created.

“If it feels like buying a home is harder than it should be, you’re not imagining things,” Munger said. “But the answer isn’t to wait—it’s to understand the system and move intelligently through it.”

How PFR Helps Frame the Homebuying Decision

At PFR, we emphasize that homeownership is both an economic and emotional decision. Our behavioral-first approach teaches young adults how to structure choices, weigh tradeoffs, and navigate uncertainty with confidence.

Rather than “telling” people what to do, we equip them with frameworks to:

• Identify when renting is optimal—and when it’s just a stall tactic.

• Understand total cost of ownership beyond just the mortgage.

• Forecast how long they need to hold a property to benefit from appreciation.

• Spot structural inefficiencies—like outdated zoning—that distort true market value.

In short, we help reduce the “toil and trouble” Smith talked about, making the path to ownership clearer and more achievable.

A Final Word from Mike

We closed the interview with a nod to Munger’s podcast, The Answer is Transaction Costs, which he refreshes weekly during the summer and monthly during the academic year. “You’ll come for the jokes,” he said, laughing, “but you’ll stay for the economics.”

Indeed, Munger’s brand of economic clarity—funny, plainspoken, and rich with insight—reminds us that homeownership is not a luxury or an outdated ideal. It is a decision-making frontier that rewards those willing to step in early, hold on, and learn as they go.