“70% of Americans who value achieving the American Dream think that homeownership is important to their dream.”
With a little more than 118 million estimated homeowners in the United States and almost 2.3 million of them residing in the Metro DC area, it’s hard to believe that less than 1 in 5 Americans believe they are living the American Dream.
When observing the current market, one could understand this belief. Statistically speaking, home values are rising twice as fast as wage growth creating a hard market for first-time homebuyers. Yes, there are plenty of FTHB programs and opportunities, and coupled with that mortgage rates are at an all-time low, but the bottom line still seems to be affordability.
Renters seemingly continue to rent for two major reasons: financial concerns and waiting for better opportunities. When taking a closer look at the present potential home buying generations and the somewhat past home buying generation, we notice that Millennials who would otherwise invest in buying a new home are carrying an estimated $1 trillion dollars in student loan debt. They want to buy but don’t feel like they have the capital to do it. Baby boomers, many of whom are current or previous home buyers, share memories (and in some cases, nightmares) of the housing market “bubble”. Reminisced offers of easy money and lines of credit seem very similar to the current low mortgage rates and flexibility experienced through banks and lenders. Instead of looking to take advantage of a new bubbling market, many have flashbacks of drastic decreases in home values and declined economic health. Victims of the 20 million foreclosures during the housing market crash, following a 7-year Great Recession, are skeptical of the American Dream and may find it a little harder to recapture. So, as you look across two generations, it’s not just FTHBs that have their limitations and reluctances when plunging into homeownership, but also those plunging back into home ownership after possibly being one of the 7.3 million who lost homes between 2007 and 2014.
- Even with all this, the American Dream is very much alive and is still sought after.
- Americans still want to buy houses. The market echoes this showing more buyers than inventoried homes.
- Attaining security, control, stability and the ability to say “bye” to landlords continues to hold significance.
FTHBs are looking for more attainable goals. Even with a 7% rise in the renting population, all generations agree that homeownership is important. Remember, most renters want to buy. Realizing that buying a home is the biggest investment most Americans will ever make doesn’t mean it has to stay a dream. When given the confidence, it can become their reality.