Owning one’s own home has always been a major part of the American Dream. Since the ‘Baby Boomer’ generation, home ownership has been a vital part of obtaining success. People who didn’t own their own homes were considered to be slackers with poor futures. However, nowadays, owning a home is not considered as important as it was before. That is not to say that Millennials do not want to own their own homes. It's just that the changing economy and society has made it near impossible to do so. The Great Recession, which officially lasted from December 2007 to June 2009, resulted in a sharp economic drop and the loss of many jobs. One positive result from it, that can be seen in today’s society, is that owning a home is much cheaper right now …show more content…
Education these days is more expensive than ever, and to land a reasonably paying job, one needs to have an almost endless list of qualifications. Therefore, homeownership could potentially help Millennials have a source of income if they rent out rooms from their houses. Eventually they could pay off their student debt at a much faster rate than just using money from their income. It would also help them save more money for their future endeavors, whatever they choose them to be. In addition, owning a home builds excellent credit fast, especially if all the mortgage bills were paid on time. Therefore, a long-term advantage of homeownership for Millennials could be that it would be much easier for them to get approved for future …show more content…
In fact, there are several reasons to account for this. The first and foremost being that they simply cannot afford a house. Compared to the generations that came before them, the level of education required for most careers is much higher for Millennials as today’s society allows no place for an unqualified person. However, that education comes with a profusion of student debt, which leaves the Millennials with a practically non-existent financial stability, something which is an extremely important pre-requisite for owning a home. Furthermore, even though the qualifications required for a decent job have increased, unfortunately, the wages have not. This means that the rate of accumulation of debt for Millennials is higher than the rate of their potential earnings, resulting in them taking a long time to pay down their debt. Therefore, most Millennials tend to aim towards higher-paying professions which can sometimes result in low job satisfaction, along with low job security as the competition is very demanding. Often faced with a very unstable and unsure stream of income, the chances of them owning their own homes would be lower. In addition to this, student loans also result in Millennials focusing on paying off their debt instead of planning to own their private places, or even moving out of their parents’ home for that
The housing crisis in America is a major problem plaguing the United States economy. Before a solution is formulated, one must consider the history of the market and the causes of the problem. And after a solution is formulated, one must present an idea for prevention of the problem for the future. Many people see similarities between the Great Depression in the late 1920s to the late 1930s. The Great Depression was caused by the Stock Market Crash of 1929.
Keli Goff declares in her article, The American Dream is Dead and Good Riddance, that the original American Dream is no longer on the minds of most Americans. She insists that most Americans no longer pursue the ideology of a nice house, educated children, and decent car that once fueled the ambitions of generations that have come and gone. A large number of people live alone in the U.S today with no children. With that being said, it’s statistically spoken that the dream is dying even though most of those loners want to direct their dream in the direction of a partner and children. Goff proceeds to ridicule the home ownership portion of the dream by pointing to a mortgage “meltdown” that came from the pursuit of home ownership by those who
As the lease of my apartment is coming to an end it had me thinking of achieving my own American Dream of home ownership but as I do my research I find the dream is far from coming true. I am sure that the issue of housing prices and rent rates are what most of us Bay Area residents talk about and debate. It is an issue that needs to be addressed by the officials of the area, city mayors, affordable housing committees, social justice activists,lawmakers, and even employers. Skyrocketing prices, low inventory, and investors’ bidding wars are not only pushing the middle and lower classes out of San Francisco and the Bay Area out but will completely eliminate them.
The real costs of home ownership Because of the high prices of homes in the United States, people often focus on only the buying price when considering the costs of owning a house, and neglect many other aspects of home ownership. A house is not your regular item that you buy, store or use for a limited amount of time. Houses come in a package with upkeep costs and taxes, and it’s wise to take these into account when analyzing your finances. The average cost of a house is estimated to be around $200,000 in 2013. As such, it’s no wonder people are distracted by such a significant amount and overlook other aspects.
“The housing market will get worse before it gets better” –James Wilson. The collapse of the United States housing market in in 2008 was one of the most devastating moments for the world economy. The United Sates being arguably the most important and powerful nation in the world really brought everyone down with this event. Canada was very lucky, thanks to good planning and proper preventatives to avoid what happened to the United States. There were many precursor events that occurred that showed a distinct path that led to the collapse of the housing market. People were buying house way out of their range because of low interest rates, the banks seemingly easily giving out massive loans and banks betting against the housing market. There were
Having a house and having a home used to coincide. Families used to live in the same house for generations, but now the sentimental value of having a house has changed. As Quindlen puts it, “There was a time when where you lived often was where you worked and where you grew the food you ate and even where you were buried. When that era passed, where you lived at least was where your parents had lived and where you would live with your children when you became enfeebled” (Quindlen 215). However, over time even that changed. Now we have grown to live in a house and then move on like it was nothing. Sentimental value for a house has dwindled. Quindlen demonstrates that “suddenly, where you lived was where you lived for three years, until you could move on to something else and something else again” (Quindlen 215). However, for those without a house, they would give anything to have that sentimental feeling that used to come with having a house. But that’s just the problem; for most a house and a home no longer coincide. We can own a house but not have a home, or vice versa. After all, “Home is where the heart is. There’s no place like it” (Quindlen 214). People can have a home without having a house. A home simply means having a family,
It can be argued that the economic hardships of the great recession began when interest rates were lowered by the Federal Reserve. This caused a bubble in the housing market. Housing prices plummeted, home prices plummeted, then thousands of borrowers could no longer afford to pay on their loans (Koba, 2011). The bubble forced banks to give out homes loans with unreasonably high risk rates. The response of the banks caused a decline in the amount of houses purchased and “a crisis involving mortgage loans and the financial securities built on them” (McConnell, 2012 p.479). The effect on the economy was catastrophic and caused a “pandemic” of foreclosures that effected tens of thousands home owners across the U.S. (Scaliger, 2013). The debt burden eventually became unsustainable and the U.S. crisis deepened as the long-term effect on bank loans would affect not only the housing market, but also the job market.
America is seen as the land of opportunity in that there are endless possibilities for an individual. In this land of opportunity, Americans strive to obtain the ideal known as the American dream. The American Dream is seen as the accomplishment of an ambition achieved while challenged by adversity.1 Americans often associate this success with the ownership of a home. The home is not simply a place of basic protection; there is a much deeper connection to the individual. Ownership of a home grants freedom and security that establishes a sense permanency for the individual. In contrast, renting a living space possesses a semblance of instability and dependence.2 The desire to improve ones’ position in life inspires one to obtain the American dream.
It is not a secret that the American dream is having their own homes is the American dream. However, because of the economic, this dream
In economics, a recession occurs when there is a slowdown in the spending of goods and services in the market. A recession causes a drop in employment, GDP growth, investment, as well as societal well-being. All recessions are caused by a specific cause, but the Great Recession of 2007-2009 was caused by a crash in the housing market. This crash was triggered by a steep decline in housing prices. All of a sudden, people bought houses because there was an excessive amount of money in the economy and they thought the price of houses would only increase. (Amadeo, 2012). There was a financial frenzy as the growing desire for homes expanded. People held a lot of faith in the economy and began spending irrationally on houses that they couldn’t afford. This led to overvalued estate and unsustainable mortgage debt. (McConnell, Brue, Flynn, 2012).
“One out of every two hundred homes will be foreclosed every month, making 205,000 new families enter into foreclosure,” Mortgage Bankers Association. The housing industry in the United States is undergoing an unfortunate crisis. There are way too many homes being foreclosed, which cause a ripple of problems.
Buying and owning your home is part of the American dream. Although the dream itself has since changed, the home still remains the main focal point. Today owning a home doesn’t necessarily mean a house. People now buy duplexes, cooperative apartments, and condominiums. For some families it could take up to a couple of generations before it’s able to have the capabilities of buying a home. To many people it means a certain achievement that only comes after years of hard work. It is a life altering decision and one of the most important someone can make in their lifetime. The reasons behind the actual purchase could vary. Before anything is done, people must understand that it’s an extraneous process and it is a long term project.
While the costs of housing have not directly affected me, my parents continue to rent because of these high costs. The average earnings of Americans compared to the average costs of homes means a home is unlikely. For me, I don't see a way for my generation to earn the American dream of home ownership after college. Home prices, taxes, insurance costs, and interest rates will create a headwind that earnings will not support. However, there are a few potential avenues that may allow my generation to join in the American Dream.
The housing market crash was a response to a chain of businesses and people who believed that the old laws of banking were no longer important. Banks were no longer required to hold on to mortgages for 30 years which gave them the ability to sell off to other companies, without concern for the mortgage holders. David Harvey, a renowned geographer, warned us of this problem, stating that “labor markets and consumption function more as an outcome of search for financial solutions to the crisis-tendencies of capitalism, rather than the other way around. This would imply that the financial system has achieved a degree of autonomy from real production unprecedented in capitalism’s history, carrying capitalism into an era of equally unprecedented dangers” (Coe, Kelly, and Yeung, 2013)
Following the sudden increase of the dot-com bubble and the possibility of decline threatening the US management started dropping the interest rates to improve the economy. The interest-rate turned as low as 1.5% in June 2003 which was at its least possible point since 1958 (Gerding, 2009). This low interest-rate found its users in the shape of homebuyers and borrowers with the housing market at last expressing some development after period of declining movement. Indeed the rate of a thirty year unchanging mortgage in the year 2003 was the lowest in 40 years and thus the dream of owning a residence in US was becoming an incredibly simple reality for Americans (Ely, 2009). With increasing housing charges borrowers assumed th...