Home Ownership: Making the Dream a Reality Again

Real estate – who owns it and how it’s distributed – is at he heart of American culture and tradition. The “American dream” is often defined as home ownership: the proverbial house with the white picket fence has become an icon for a life of stability, security and tranquility.

The recent housing crash changed all that for many Americans. As the dream of homeownership collided with subprime lending and a hungry housing market, many people found themselves locked out of the homes they’d struggled so hard to have. Now, though, numerous indicators suggest that the US housing market is rebounding. But for those displaced homeowners, another try at the American dream may be permanently out of reach.

Statistics are encouraging. Housing starts have risen for the first two quarters of 2012, and so have building permits. Likewise, inventories of available housing have fallen to less than a three months’ supply in major markets like Phoenix and Seattle. Along with this, foreclosure filings in the first half of 2012 fell to their lowest level since 2007. Rents are rising, and real estate investors like Jason Hartman are snapping up the remaining foreclosures now going to market.

Still these figures conceal a darker side – one which suggests that for many Americans, including those who previously owned homes and lost them, that dream of long-term home ownership is still far from a reality. According to a recent study reported by NuWire Investor, about 15% of all contracted home sales collapse at the last minute. And in many large metropolitan areas as well as smaller towns, less than half the available housing is occupied by owners, not renters.

The rental market is surging, capitalizing both on those who choose to rent, such as young single professionals, as well as on those who would prefer to own a home but can’t. Yet in numerous areas around the country, unemployment hovers in double digits and stagnant economies trap workers in low wage jobs with little expectation of having the financial stability to put a down payment toward a house, or qualify for a loan to complete the purchase.

Amid promises by government officials at all levels to stimulate job growth, employment remains stagnant as prices increase for all goods and services, not just housing. This creates a widening pool of people preoccupied with, as psychologist Abraham Maslow puts it, survival needs, unable to offer energy and resources toward concerns beyond their immediate situation.

According to numerous economists, a key contributor to job growth is a thriving private sector, freed of crippling regulations and taxations. Curtailing or eliminating penalties and regulations that limit business initiatives and new enterprises can contribute to expanded growth of industries and commerce, with quick returns for American workers in most sectors. One benefit of a rosier job picture is increased stability for larger numbers of workers. Along with that comes the income and creditworthiness to start the home buying process.

Job creation remains at the forefront of most leading proposals to stimulate economic growth. Policies that encourage private enterprise and foster new enterprises at home and abroad create opportunities to return more Americans to work – putting that American dream of home ownership back within reach. (Top image: Flickr | Images_of_Money)

The American Monetary Association Team

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