Vintage Canadian currency photo by The Enchanter Tim.
Where did the American dream go?
We reported that a Fannie Mae poll shows that 64% of Americans view homeownership as the best investment to make, while a Pew Poll revealed 81% of Americans share that view. While these numbers sound high, they are on a sharp decline as consumers experience uncertainty in their work life and see renting as less risky in a climate where they are uncertain if they will be employed tomorrow.
Curiously, Rassmusen Reports notes that Americans don’t exactly see salvation in government programs aimed at housing. Of those polled, 62% held the belief that if a homeowner cannot afford raised mortgage payments, they should move to a more cost effective home while 25% stated it is better for government assistance to play a role in troubled homeowners making payments, and 13% were undecided.
Add to the reduced risk in renting and less emphasis on the American dream of homeownership, the stigma around renting has faded considerably in recent years and “Generation Rent” is growing as the American Dream shifts away from the idea of mandatory homeownership just as we shifted away from the idea of a mandatory nuclear family.
So why does Canada want the American dream?
Foreign investment is increasing in the U.S. with National Association of Realtors (NAR) reporting international investment levels at $82 billion from March 2010 to March 2011, up from $66 billion the 12 months prior. The increase of nearly 25% is certainly noteworthy.
Canada makes up 23% of all international sales of U.S. properties, followed by China, Mexico, the UK and India. One in five properties bought in Florida are by foreign investment, mostly Canadian.
Foreign investing in foreclosures, as seen by Florida and California accounting for 40% of all international investment, as both states are saturated with foreclosure properties for sale. As rent is becoming more chic, international investors are defining the American Dream as a buy low, hold, rent for a profit, then sell high when the economic tides turn.
The American dream is less about familial stability and the right to knock down a wall, and is now about American homeowners holding on and international investors riding the foreclosure wave to prosperity.
Paula Henry
August 21, 2011 at 12:23 pm
There's a big difference between Americans seeing home ownership as a good investment and not believing in the American dream. If we take away government interference in real estate over the past 8 years, I believe most Americans would own a home and the 81% Pew Poll is more accurate.
Unfortunately, the down cycle and mortgage regulation has created a generation of home buyers who can not qualify to buy a home. I talk to them every day; they are there, they want to buy a home, they believe in the American Dream as their own, but they will end up renting.
Manhattan Beach Realtor
August 21, 2011 at 3:31 pm
Simple answer to increased foreign direct investment in U.S. – the declining dollar. The more our currency is allowed to debase, the cheaper our real assets will be to foreigners; this is especially true for major trading partners who will be looking to quickly exchange paper dollars for real assets to circumvent the race to the paper currency bottom.