It’s safe to say that the American Dream is still around in a pretty prominent way; however, is the American Dream and all it’s trimmings becoming obsolete? One of the key pillars of that famously patriotic dream was the idea of owning a home with a mortgage somewhere out in the suburbs. However, the recent years following the real estate bubble and the 2008 recession have shown a decrease and stagnation in home ownership across the country which could lead to the idea that the American Dream may stop being relevant.
There are massive amounts of articles discussing this problem in America, but the general consensus seems to be that there are five major reasons for the stagnation/decline of homeownership after the housing bubble and 2008 recession all outlined in an article for US News. The first is the lack of mortgage availability due to the credit shortage following the recession, which led to the decline in loan approval even with excellent credit. The second, an issue incredibly relevant to out generation, is the dramatic increase of student debt among younger generations and the rising prices of higher education which leads to the lack of saving for the future goals of owning a home. The third has to do with a more psychological aspect of s term coined “post-foreclosure stress disorder”, essentially meaning that families and individuals whom had their homes foreclosed upon during the recession could be more hesitant to take the risk on homeownership once again. The fourth and fifth reasons appear to be the issues of housing supply and affordability, and the supply is minimal while the affordability for first time home owners isn’t affordable at all.
The following data for homeownership was collected from the US Census Bureau’s website. Sorry it’s a download, my computer wouldn’t let me insert the excel sheet into the post.
