Is The Dream of Home Ownership Dead?

Home ownership is usually considered to be the hallmark of the American Dream. Yet complications have arisen. Prices have increased and the availability of mortgages has fallen since 2008. Home ownership itself has been called into question going forward. We’re going to look at whether the end of home ownership is a real possibility in the future.

Texas has Proven It’s Going Nowhere

The most lucrative property market for the average real estate investor is Texas. With no state income taxes and large rates of job growth, Texas has become a prime example of home ownership being alive and well. It’s true that some states have become unaffordable, but Texas isn’t one of them. The size of the state means that there’s an abundance of land to build on. And the fact of the matter is that this has made buying property extremely affordable.

Americans Have Always Desired a Home of their Own

The American mindset has always leaned heavily towards home ownership. And home ownership is still a desire for both young and old. Texas, for example, is a state that prides itself on every family having a place of their own. Home ownership rates are still high in Texas. It’s true that people do rent, but it’s usually with the goal of saving for a deposit for getting a mortgage later.

What about Millennials?

The reason why this conversation has come up is that more millennials than ever are putting off buying a home so they can spend their money on experiences. This has led to a whole generation that has decided to rent. The shift in attitudes has led to more people renting, but at the same time, these millennials are still buying homes. They’re just starting at a later date than their parents.

The New House Price Boom

Another factor that has to be taken into account is that many areas of the country are unaffordable. The incredible rise in house prices after 2008 has meant that millennials simply can’t get a deposit together in order to get a mortgage. That has left many Americans being forced to rent. The situation will likely not improve anytime soon because banks are sticking to strict regulations and ensuring that deposits need to be significant before someone will even be considered for a mortgage.

Is Home Ownership Falling?

No, but it has certainly changed. Driftwood, Texas housing economy may be in a state that still has low house prices, but elsewhere that is not the case. Many states have made it almost impossible to purchase a house without a large deposit. That may increase the number of people renting, but it certainly will not deter Americans from aspiring to buy homes later in life.

The age of the average homeowner will continue to rise, but even if home ownership does begin to die there is still a need for homes to rent, so investors are sure to pick up the slack if first-time buyers drop.

Do you think home ownership is dying?

Join our newsletter

Screen_shot_2017-04-24_at_3.52.19_pm

If you like Critical Financial, subscribe and get our latest content via email.

Powered by ConvertKit

Share this post:

Leave a Comment

*