Picture it: A white picket fence, the dog in the backyard, sipping coffee on the porch.
Homeownership has been the symbol of the American Dream. But the Federal Reserve announced another hefty increase in interest rates Wednesday, surely driving up the cost of home mortgages again — an effort to bring down persistent inflation. With the cost of houses remaining stubbornly high and the price to borrow soaring, is that idyllic picture slipping away?
Our parents and grandparents bought houses with relative ease. The share of Americans owing a home in the U.S. averaged 65.3% yearly from 1965 until 2022. It reached an all time high of 69.2% in the second quarter of 2004 and a record low of 62.9% in the second quarter of 1965. Pretty steady, for a span of roughly 60 years.
With multiple hits in a row — a crunched housing supply in big cities, the pandemic, an economic downturn, soaring inflation, a likely recession — the Millennials and Generation Z must feel like owning a home is more out of reach than ever.
According to Harvard University’s annual State of the Nation’s Housing Report released in June, rising home prices exacerbated an already tight housing market. Rising interests add to the equation, pricing out 4 million renters.
“The income needed to qualify for a home has skyrocketed: The mortgage, property tax and insurance payments for a median-priced home of $340,700 cost $700 more per month in April 2022 than they did a year before,” the authors wrote. “And the annual income needed to qualify for such a home is $28,000 higher in April 2022 versus last year.”
The housing market is apparently showing some signs of slumping. It had to, since mortgage rates have nearly doubled. The 30-year fixed-rate mortgage was at 7.08% at the end of October, up from 3.85% in March, according to Freddie Mac.
Even if interest rates go back down in the spring, the price of houses could spike again, bringing back bidding wars.
For many people, owning a home is not just part of the American Dream, it’s practical: Everyone has to live somewhere, so why not make your biggest monthly cost an investment? Without that, many people are spending thousands of dollars without any long-term gain.
As a conservative, it’d be easy to place the blame for this squarely on the head of the Biden administration. While the president can do little about interest rates, policy changes could trim inflation and the price of gas. Still, the real economic shift began with the Trump administration, and the stimulus handouts he promised to help people get through the pandemic. Between the two, they pumped too much money into the economy did exactly what many economists predicted: Fueled the cycle of inflation, which made the housing market even pricier.
There are upsides to not owning a home: One doesn’t have to scrape together a 5% down payment, and then another 1-5% value of the home in savings in case the air conditioning goes out or the roof is damaged or a basement floods and the floor needs to be replaced.
A mortgage-free life can also mean more freedom. If you’re not house-poor, you can still enjoy some of the simpler pleasures in life that budget gurus scoff at like a regular Starbucks run, dining out, or fun weekend away with friends or family.
We might be heading into a recession, and there’s a lot of politicians who can be blamed for it. But it’s also just a regular part of our economic cycle. If fewer people can afford housing, they might have to put their efforts elsewhere for awhile.
Maybe, for now, the American dream looks like freedom to travel, a savings account, dining out or other “guilty” pleasures. The American economy may struggle for a bit but there are few places on earth one can work remotely, enjoy the finer things in life, save up for a house if you work hard enough, and enjoy the fruits of your labor.
It may not be that the American dream is dead but that it must be reimagined — at least for now.
©2022 The Charlotte Observer. Visit charlotteobserver.com. Distributed by Tribune Content Agency, LLC.
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This is the reason no one wants to work. As soon people figured out that the Democrats had eliminated most chances at the American Dream all the snowflakes just went on the dole.
The greatest moment of actual personally fought and won American freedom experience, felt by hard working Americans, is the day the final mortgage payment is made, and you get an $1500-$2000 a month tax free raise. To spend any which way you choose. The corrupt politicians can crater the economy, cost you to lose your high paying job, and as long as you can scape up the property taxes you will always have a roof over your head and the home of your dreams that not even the political criminals can take away. Please note, that if you make one extra monthly payment a year on a 30 year note, you will pay off your mortgage in 15 years and save hundreds of thousands of dollars in interest and 15 years of social slavery to the banks and the government. Same applies to our national debt which why the political crime families and the financially fickeled Fed will not tell or do this, because people in debt and fear of losing their homes are more malleable and easy to control
Being one can always get booted out of a home, EVEN IF THEY HAVE fully paid off the mortgage, OR bought it outright in case, BECAUSE OF Property taxes.. I always wonder, HOW these govt plebs, think we “own it”, since DUE TO the property tax issue, technically you’re just renting it from the city/state.
EX_CB_HD: “This is the reason no one wants to work.”
The reason people don’t want to work is because they don’t have to. For now the treasonous, socialist Democrat Party ruled government is giving deadbeats, other working people’s money not to work. This doesn’t work long.
2 Thessalonians 3:6-10 In the name of the Lord Jesus Christ, we command you, brothers and sisters, to keep away from every believer who is idle and disruptive and does not live according to the teaching you received from us. 7 For you yourselves know how you ought to follow our example. We were not idle when we were with you, 8 nor did we eat anyone’s food without paying for it. On the contrary, we worked night and day, laboring and toiling so that we would not be a burden to any of you. 9 We did this, not because we do not have the right to such help, but in order to offer ourselves as a model for you to imitate. 10 For even when we were with you, we gave you this rule: “The one who is unwilling to work shall not eat.”
AND the list of what can get you ON the welfare teet, is just getting longer and longer.
Any country with a crushed potency-diminished middle class is much more easily Secular Socially conquered than one with a strong vibrant based middle class of earned protecting personal property that has the money, minds, and power of personal property means to organize and oppose the current American Democrat party social collectives of corruption. who seek to diminish America’s honest wealth creation earned by others, now miss-spent by the elected socialist government gods to empower via discriminatory student loan forgiveness, their recently University legions of adopted children of democrat indoctrinated illegitimacy, paid for by bilked honest American taxpayers. The Biden administrations attempts to raise the price of goods and homes via artificially hiked energy costs, that raise building costs and prevents the accumulation of home properties by the planned inflation of unaffordable hiked interest rates is proof positive that it is our wealth creating hard working middle class Americans targeted by the secular socialist Democrats, deemed to be their biggest threat to the social conquering of a once Self-governing people. Deprived of the means, education and capability of individually governing their own lives in beguiled government dependency, it will collectively crumble the cumulative the ability of a nation to collectively govern itself, soon followed by executive tyrant type tyranny.,,,enter the unconstitutional Biden executive orders.