06 Jan Homeownership Is No Longer Expected In America

It has always been the American dream to own a home.  In fact, the government made it clear that it was our duty as citizens to own a home and the banks were there to convince us that it was the best investment we could ever make.

With fixed mortgage rates hovering around 4.8% percent and home prices at an almost all time low, there is still a lag in the housing market.  Experts will attribute it to a struggling job market, which undoubtedly plays a role, but I think Steven Bergsman of Inman.com has the right idea of why home purchases are so low despite favorable conditions.

Bergsman’s theory centers on the changing concept of homeownership.  In the modern American life, homeownership has taken a backseat for several reasons.  One being that the Gen Y buyers entering the market are scared to death to own a home after seeing what just happened to their parents.  It’s hard to tell a young person buying a home is a smart investment when foreclosures are everywhere and borrowers are paying off mortgages worth more than their home.  He also makes the point that in order to take a job in a new city, you have to sell your home, which is not easy to do.  We now see ownership as a restriction in our lives.  It prevents us from the betterment of our careers and living situations.

Another great point made by Bergsman has to do with the condo market.  As he states, once the government and banks began forcing the idea of homeownership, they eventually began to focus on the large city dwellers.  This is where condos came in.  Developers took aim by building high-end homes for these urban dwellers to buy.  This may explain one reason why the condo market is struggling so badly.  Those urban dwellers may have been the first ones to realize that owning a home isn’t always the best thing, nor is it out expected anymore.