Is Homeownership Still the American Dream?
Defining the American dream is personal, and no one individual will have the same definition as another. But the feelings it brings about – success, freedom, and a sense of prosperity – are universal. That’s why, for many people, homeownership remains a key part of the American dream. Your home is your stake in the community, a strong financial investment, and an achievement to be proud of.A recent survey from Bankrate asked respondents to rank achievements as indicators of financial success, and the responses prove that owning a home is still important to so many Americans today (see graph below):As the graph shows, homeownership ranks above other significant milestones, including retirement, having a successful career, and earning a college degree.That could be because owning a home is a significant wealth-building tool and provides meaningful financial stability. The National Association of Realtors (NAR) explains:“Homeownership builds financial security. With 65.5% of Americans owning homes, the net worth of a typical homeowner is nearly 40 times the net worth of a non-owner.”There are other ways your home acts as more than just a roof over your head, too. The Mortgage Reports highlights a few of the many benefits homeowners enjoy, including:Your equity (and wealth) grows through home price appreciation.Your housing costs are fixed – and that can help combat rising costs from inflation.You’ll have greater privacy and the opportunity to customize your living space.Plus, homeowners tend to be more active in their community. Like NAR says:“Living in one place for a longer amount of time creates and [sic] obvious sense of community pride, which may lead to more investment in said community.”What Does That Mean for You?If your definition of the American Dream involves greater freedom and prosperity, then homeownership could play a major role in helping you achieve that dream. When you set out to buy, know there are incredible benefits waiting for you at the end of your journey. You’ll have a place you can call your own, feel most comfortable, and grow your wealth.First American puts it best, saying:“Homeownership remains central to the pursuit of the American Dream. It is a critical driver of economic mobility, delivering financial and social advantages. . . .”Bottom LineBuying a home is a powerful decision and a key part of the American Dream. And if homeownership is part of your personal dreams this year, let’s connect and start the process today.
¿Sigue siendo el sueño americano la propiedad de la vivienda?
Definir el sueño americano es personal, y ningún individuo tendrá la misma definición que otro. Pero los sentimientos que produce, el éxito, la libertad y una sensación de prosperidad, son universales. Es por eso que, para muchas personas, la propiedad de la vivienda sigue siendo una parte clave del sueño americano. Su casa es su participación en la comunidad, una fuerte inversión financiera y un logro del cual estar orgulloso.Una encuesta reciente de Bankrate pidió a los encuestados que clasificaran los logros financieros, y las respuestas demuestran que ser propietario de una casa sigue siendo importante hoy para muchos estadounidenses (vea la gráfica a continuación):Como muestra la gráfica, ser propietario de vivienda se ubicó por encima de otros hitos importantes, incluida la jubilación, tener una carrera exitosa y obtener un título universitario.Eso podría deberse a que ser propietario de una casa es una herramienta característica de la creación de riqueza y proporciona una estabilidad financiera significativa. La Asociación Nacional de Realtors (NAR por sus siglas en inglés) explica:“La propiedad de la vivienda genera seguridad financiera. Con el 65.5 % de los estadounidenses siendo propietarios de viviendas, el patrimonio neto de un propietario típico es casi 40 veces el patrimonio neto de un no propietario”.También hay otras formas en que su casa actúa como algo más que un techo sobre su cabeza. The Mortgage Reports destacan algunos de los muchos beneficios que disfrutan los propietarios de viviendas, incluyendo:Su plusvalía (y riqueza) crece a través de la apreciación del precio de la vivienda.Sus costos de vivienda son fijos, y eso puede ayudar a combatir el aumento de los costos de la inflación.Tendrá mayor privacidad y la oportunidad de personalizar tu espacio vital.Además, los propietarios tienden a ser más activos en su comunidad. Como dice NAR:“Vivir en un lugar durante un período de tiempo más largo crea un sentido obvio de orgullo comunitario, lo que puede conducir a una mayor inversión en dicha comunidad”.¿Qué significa eso para usted?Si su definición del sueño americano implica una mayor libertad y prosperidad, entonces la propiedad de la vivienda podría desempeñar un papel importante para ayudarle a lograr ese sueño. Cuando se proponga comprar, sepa que hay increíbles beneficios que le esperan al final de su trayectoria. Tendrá un lugar que puede llamar suyo, sentirse más cómodo y aumentar su patrimonio.First American lo expresa mejor, diciendo:“La propiedad de la vivienda sigue siendo fundamental para la búsqueda del sueño americano. Es un motor crítico de la movilidad económica, ofreciendo ventajas financieras y sociales…”.En conclusión,Comprar una casa es una decisión poderosa y una parte clave del sueño americano. Y si la propiedad de la vivienda es parte de sus sueños personales este año, vamos a comunicarnos y comenzar el proceso hoy.
Two Reasons Why Today’s Housing Market Isn’t a Bubble
You may be reading headlines and hearing talk about a potential housing bubble or a crash, but it’s important to understand that the data and expert opinions tell a different story. A recent survey from Pulsenomics asked over one hundred housing market experts and real estate economists if they believe the housing market is in a bubble. The results indicate most experts don’t think that’s the case (see graph below):As the graph shows, a strong majority (60%) said the real estate market is not currently in a bubble. In the same survey, experts give the following reasons why this isn’t like 2008:The recent growth in home prices is because of demographics and low inventoryCredit risks are low because underwriting and lending standards are soundIf you’re concerned a crash may be coming, here’s a deep dive into those two key factors that should help ease your concerns.1. Low Housing Inventory Is Causing Home Prices To RiseThe supply of homes available for sale needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation.As the graph below shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s still a shortage of inventory, which is causing ongoing home price appreciation (see graph below):Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a limited supply of homes for sale. Odeta Kushi, Deputy Chief Economist at First American, explains:“The fundamentals driving house price growth in the U.S. remain intact. . . . The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.”2. Mortgage Lending Standards Today Are Nothing Like the Last TimeDuring the housing bubble, it was much easier to get a mortgage than it is today. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the years after:This graph helps show one element of why mortgage standards are nothing like they were the last time. Purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash. Realtor.com notes:“. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.”Bottom LineA majority of experts agree we’re not in a housing bubble. That’s because home price growth is backed by strong housing market fundamentals and lending standards are much tighter today. If you have questions, let’s connect to discuss why today’s housing market is nothing like 2008.
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