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.
This was a great way to approach the assignment for this week! I really liked how you were able to provide many points of evidence. Do you think these results that you found will be getting better or worse over time?
This is a fascinating article because it is alarming at how there is such a drop in availability for mortgages. I agree with you; it is essential for our generation to receive a firm understanding what that could result in when we are in the workforce. One important thing I would like to look at now after reading your post is how accessible are mortgages now after the recession in 2008. As well as what can be done to fix the problems created from 2008 and we can do to ensure that something like that doesn’t happen again.
So it seems as though ownership is increasing back to the percentage it was was in 2013. Certainly a decline is shown here, but the good news is it seems to be improving since 2016. According to a Bloomberg article released this past July, homeownership should increase to close to 60% by 2025 particularly associated with our age group and those who are in their later 20’s/early 30’s right now.
https://www.bloomberg.com/news/articles/2018-07-02/u-s-homeownership-seen-rising-for-young-demographic-trends
Interesting article. The issue of paying mortgages and simply having enough money to get by has been an issue in America for quite some time. I think nowadays the issue has become more pronounced, as evidenced by the sharp rise in housing costs in many cities across the country (notably San Francisco), and the erosion of middle class America. How are we going to solve this problem moving forward.