Americans are falling out of love with the idea of owning their own home. Find out why.
My friend and her husband have been looking to buy a home for about 6 months now that they are at the point in their lives to do so. This should be a happy time for them, however most of their posts on Facebook are nothing but frustration at the process. Their last post about the situation states they have lost out on their 9th house. In their frustration, she posted this article about their troubles. They have been consistently getting bought out of homes with cash offers. While they are not giving up on finding their dream home, it can make a person think twice on if it’s worth the hassle. As a Real Estate agent in the article explains, “It’s just not fun anymore”.
Below are the four reasons given as to why Americans are choosing to not own a home:
- Americans now view a home as a poor investment. With the mortgage rates as low as they are, still the appreciation value of owning a home is lower. This means that the home will offer a negative amount of equity in a decade. Americans see this as throwing money away. Owning a home has always been one of the major factors of having financial security and being able to sell the house when the time came for more than its worth.
- More young people may prefer renting. Due to the economy, younger people are finding it harder to find employment once out of school. Some may still live at home or be under crippling student debt. Even if they had a sense of homeownership pride, that may not be possible until much later in life. The article mentions that homeownership may see a downfall because of this notion.
- Institutional buyers may be largely responsible for the housing rebound. We are all aware of the lower interest rates in the housing market, as it has been all over the media these last few years. This has lead to investors being able to buy up more properties than usual. With this added increase to the housing market, it is given a false hope that the housing market was being flooded with ordinary people (such as my friend listed above). Once the interest rates start going up, however, and the investors are not buying so many properties, the market may show that there are actually less ordinary people looking to buy a home than originally thought.
- Americans are spooked about the entire economic outlook. Between politics, the housing market, the recession, and overall negativity of the economy, Americans aren’t seeing owning a home as the right move for them. They feel a sense of insecurity owning a home during these unstable times. The author mentions, “buying a home generally requires a sense of optimism about your own circumstances and, more broadly, the economy in general. Americans aren’t feeling it.”
Along with the negative aspects of owning a home due to these factors, one can get a sense of insecurity and failure due to the increased numbers of home foreclosures these past few years. It’s not just the unease of buying the home, but the fear of not being able to keep it.
I know my friend will continue to search for the home her and her family are so desperately searching, but I can understand why she is upset over the situation. What started as an adventure for her family and the next step in their lives has only been met with roadblocks and letdowns. Hopefully soon they’ll be able to find that one perfect home for them, but for everyone else, there’s the rental market to bide the time.