Years ago when you talked about home ownership being the American Dream, that thought conjured up white picket fences, homes in the suburbs and young families making the purchase of their ideal single family homes.
The housing boom and housing bust nationwide have slightly changed the images the come to mind. Many would still wholeheartedly agree that home ownership is a large part of the fulfillment of the American Dream. It has been a roller coaster ride for those who got into or out of the real estate market and home ownership at various times during the boom to bust phase. Home ownership still reigns as one of those great American Dreams but it's changed for many in 2011.
Right now, conditions in the housing market for those entering it for the first time, or re-entering it with the purchase of another home, couldn't be better. Mortgage rates are the lowest they've been in 60 years according to Kiplinger's Housing Outlook 2011: When Home Prices Will Head Up.
In March 2011, it was predicted by many experts that housing prices would drop another 25%. While that certainly did not ring true across the nation in all markets, about 75% of the country actually saw another dip in housing prices. According to Trulia, a real estate website which compiles real estate sales data across the nation, home prices are currently cheaper in 74% of the US metropolitan cities and towns they studied in July 2011. That is staggering when you realize that in 3/4 of the country, the results of Trulia's data indicate it was actually cheaper to buy a home verus rent one when you look at current home prices being down as well as very low mortgage interest rates.
But, can every American go out and realize the American Dream of home ownership with such great market conditions? Not so fast.
The boom and bust have left many families casualties of foreclosures because they were so far underwater in their mortgage that there was no point of redemption. Sadly, those impacted have marks against their credit in addition to losing their homes. Of those, it's understandable why many of them would question if home ownership is indeed the American Dream, or not?
The Kiplinger's article cites that another 23% of current mortgage borrowers are upside down in their home, mortgage balance to current resale value. With so many underwater It's understandable to see where home ownership in today's marketplace can lead to homeowner stress. The promise of home ownership being the American Dream has faded for those who are in that position, understandably so.
Those who sold during the boom and purchased another home naturally did well on the sale but then paid a higher price for their newly purchased home. In the end, they may have netted more from selling during the market heights but the new home purchase still puts them underwater.
Those first time buyers who entered the market during the boom often bought at the height of the market and one doesn't have to look far to see the results for many ended up being far from the American Dream and more a nightmare. As housing prices dropped and foreclosures ran across the country, hitting some areas harder than others, home ownership as the American Dream changed the lives of many families who lost their homes.
Conditions right now are beautiful when you consider the best possible time to realize the American Dream of home ownership. Prices are great, mortgage rates are at an incredible low and for those who are blessed enough to be entering the market now, the timing couldn't be better.
Unfortunately, we are also in times where unemployment is at all-time highs meaning more people are experiencing credit issues and can't take advantage of this great timing. Plus, many mortgage lenders have tightened up as far as their lending practices go so as not to relive the foreclosure crisis created by the boom and bust of recent years.
Home ownership is still part of the American Dream but for many it's hard to see that. While conditions should be perfect for most to enter or re-enter the housing market as home owners, it's not possible for many. The recovery has been slow and painful for many and CNN's Home price recovery slips out of sight published last month doesn't paint a pretty picture for recovery anytime soon.
This is most unfortunate, because this Examiner will always believe that home ownership is and rightly should be a part of the American Dream for families. Unemployment, the debt ceiling mess and so many factors are making this part of the American Dream unreachable or unattainable for many, and has displaced so many others, and it's incredibly sad.
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