Connect with us

Homeownership

Millennials ‘kill’ everything, but not the American dream of homeownership

(REAL ESTATE) Homeownership may come with anxieties, but Millennials aren’t giving up on it as part of the American dream. Here are the current sentiment studies.

Published

on

homeownership

Is the American dream of owning a home still alive and well in 2019? Well, yes and no. The National Association of Realtors’ (NAR) latest Aspiring Home Buyers Profile survey revealed some surprising numbers.

NAR’s annual report uses information from its quarterly Housing Opportunities and Market Experience (HOME) surveys to take an in-depth look at the consumer preferences of Americans who don’t own a home, whether they pay rent or not. Those surveyed were asked to weigh in on everything from housing affordability to the American dream of homeownership to whether it’s a good time to purchase a home.

The 2019 Aspiring Home Buyers Profile found that while more than 90 percent of homeowners still believe that homeownership is part of the American dream, only about 75 percent of non-homeowners feel the same way. Why do nearly one-fourth of those non-homeowners think that way? The answer is simple: Affordability. Nearly half of non-homeowners in the third quarter of 2018 said the main reason they don’t currently own was they couldn’t afford it (up from 33 percent in Q2). Those blaming affordability for their non-homeownership dropped back to 43 percent in Q4.

The non-homeowners’ hesitation might be warranted. While no one can know exactly what will happen in the coming year, many forecasters predict home prices will rise again — at a minimum of 2 to 3 percent — in 2019.

Despite the financial obstacles ahead of them, a majority of non-homeowners remained optimistic last year. Millennials may not be buying diamonds or soap bars, and minimalism reigns supreme with the aging demographic, but homeownership remains part of the American dream, even if the dream is riddled with anxieties.

The number of them who still hoped to own a home in the future never dipped below 73 percent in 2018. Their main reasons they would buy? An improvement in their financial situation (28 to 31 percent) or a change in their living situation, e.g. starting a family or retiring (26 to 30 percent).

An interesting note: In the fourth quarter, the HOME survey added questions pertaining to friends and family moving in with the respondents in 2018. Nine percent of respondents reported an adult child moving in, with another 5 percent reporting another adult moving in during the past year. Nearly half of those respondents said it was planned to be a long-term or permanent move. However, the survey did not ask those respondents if affordability was a factor in this decision.

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox

Staff Writer, Krystal Hagan holds a bachelor of journalism from the University of Texas at Austin. She lives the full-time RV life just outside Austin, Texas, with her musician partner, three dogs, and a six-toed cat. In her free time, she binges TV shows, brandishes her otherwise useless pop-culture knowledge at trivia nights, and tries to become BFFs with every animal she meets.

Homeownership

Researchers point to the government as source of California’s housing shortage

(REAL ESTATE NEWS) California is in the middle of a housing crisis with ongoing shortages. The Governor has a plan, but many have pointed to the government as the source of the problem with no end in sight.

Published

on

california

These days, California ranks #2 as the state with the highest cost of living in the United States, second only to Hawaii. The average home price in the The Golden State is over $1 million. Your monthly energy bill will be over $200.  And still, it’s one of the most desirable places to live. Small wonder that people flock to California, because the state ranks worst for doing business thanks to taxes and regulations.

It’s no secret that California has a housing shortage. It’s not even that the housing costs are sky-high. It’s that there simply aren’t enough homes to go around. Gov. Gavin Newsom says he plans to build 3.5 million new homes over the next few years to fix this crisis, but it may take much more to bring housing to the homeless and under-employed.

In a Los Angeles Times Op-Ed, James Broughel and Emily Hamilton suggest that California is overregulated when it comes to housing.

The average state has about 137,000 restrictions in its housing code. California has over 395,000.

Although many of the regulations are necessary to protect the environment and to ensure safety, it can contribute to higher construction costs, which it turn are passed on to consumers.

The California Code of Regulations contains over 21 million words. (Forbes estimates that the US tax code was about 4 million words in 2013). At a reading speed of 300 words per minute, for 40 hours a week, it would take 29 weeks or more to read the thing. And that doesn’t take into account comprehension, which requires a legal degree.

California’s housing shortage is a man-made problem that will take years to undo. One builder in Orange County planned a new community in Santa Clarita that would provide almost 22,000 homes.

The project has been stalled since 1994.

As the project ages, each home being constructed faces new regulations, increasing the cost of the home, making it near impossible for average families to obtain the American Dream.

It’s been suggested that California’s housing shortage is a political choice.

Bureaucrats are choosing to restrict housing by placing regulatory burdens on builders instead of helping the population find affordable housing to be more stable. Families are leaving California to find a more affordable cost of living and housing which will continue to hurt the state.

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox

Continue Reading

Homeownership

American marriage is happening later and it’s not why you think

(HOMEOWNERSHIP) Marriage is happening later and later with Americans and economists believe it’s not just about the changing face of relationships; it’s also about money and wanting to wait for financial stability.

Published

on

marriage move in

As we know, homeownership is a cornerstone of American family life. Homes provide long-term financial stability as a major investment for homeowners. Furthermore, they also provide a strong environment in which to raise a family; so many of us have fond memories of running around our backyards, or cozying up in the family room.

So, it stands to reason that homeownership and marriage are tied together; many couples will buy a home soon before or soon after they get hitched.

With all that said, some of the following statistics may be alarming, as it points to a trend that may play into the delay of homeownership.

Lots of data gathered over the past few years shows Americans are marrying later and later, if at all, according to a report from The Guardian. Today, Half of American adults are married, compared to 75 percent in 1960. The disparities are mostly consistent with class divisions.

Per the Guardian article, “26 percent of poor adults are married, compared with 51 percent in 1990.” That same study found 39 percent of the modern working class of adults are married, but that number was 57 percent in the 90s.

Education is closely tied with financial status, so an education disparity is also present. Today, 50 percent of adults with a high school are married; that rate was over 60 percent 25 years ago.

As the Guardian puts it, “Young people are increasingly seeing marriage as a “capstone” rather than a “cornerstone” event, a crowning achievement once other goals have been reached, rather than a launchpad for adulthood.”

That achievement is financial stability, and many more Americans are feeling a financial crunch.

There’s data to back this up, too. For example, a poll found “nearly half of never-married adults with incomes under 30k say being financially insecure is a major reason” behind their lack of marital commitment to a partner.

Part of steady income is a steady job, and past Pew Research found 78 of never-married women wanted a future partner to have a steady job.

A decline in manufacturing jobs is contributing to this as well, per some economic research on the subject, which may help to explain how the steepest drops in marriage rates come from the lower and middle class.

It’s not unreasonable to speculate that major living costs factor into that decision as well. For example, with real estate prices going up around the country, especially in major cities with strong job markets, the capstone that is owning a home is pushed farther away from the average American.

If marriage and homeownership are so closely tied together, the delay of one may also contribute to a delay in the other.

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox

Continue Reading

Homeownership

A definition of the term Starter Home and why no one should use it

(HOMEOWNERSHIP) You see the term in the MLS for fixer uppers and you hear it when Realtors are working with first time buyers but the term “starter home” shouldn’t be in anyone’s vocabulary.

Published

on

starter homes debt existing home sales

Just words

Collins English Dictionary defines a starter home as a “small, new house which is cheap enough for people who are buying their first home to afford.” You won’t find the phrase too often outside of the real estate industry.

bar
There isn’t much about the etymology of the phrase, but most likely, it’s a marketing ploy to get people to buy into the idea of purchasing another home in a few years.

Grind your gears

Mark Greutman, husband to Lauren Greutman, believes that the term “starter home” should bother people. The phrase implies that you will upgrade later.

Your starter home isn’t good enough for the rest of your life. And not to get into how well Americans have it, what about people who will never be able to afford anything more? Is it an insult to them?

Do You Really Need Two Living Rooms?

Older generations bought one home and lived in it until they could no longer be independent. In today’s world, we buy a starter home, then upgrade to have more space, to live farther away from our neighbors, to have rooms that are only used once or twice a year, and to make sure you have a two or three car garage to hold your vehicles and more stuff, some of which isn’t taken out very often.

But consider this – You could pay off your starter home in 15 to 20 years, if you budget right.

You could be out from under a mortgage and have money to travel, send the kids to college or even retire early. When you think about what led to the financial crisis in 2008, isn’t it better to have a smaller house where you can make the payments than worry about losing your house?

Be Content Where You Are

Realtors are motivated to make sure that they have customers. If people buy one home with the intent to stay, will the market dry up? Probably not, because people move and a new generation will be ready to purchase homes for their own family.

Let’s think about that phrase, “starter home.” It fuels consumerism and discontentment. Don’t call cheaper houses starter homes, but just a home.

#StarterHome

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox

Continue Reading
Advertisement

Our Parnters

Get The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox!

Emerging Stories

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox