Have you noticed how owning a home is getting a terrible reputation lately?
We are a society that loves to challenge the status quo, and thanks to the spectacular collapse of the housing market, the long-time “American Dream” is the new target.
“Isn’t this the best time to buy a home?,” you might ask. “Aren’t experts encouraging people to buy, buy, buy again?”
Guilty on both counts, yet there’s still a lot of hesitation in the air. Could it be because:
- Buyers are afraid that the downward trend isn’t over yet?
- Buyers are concerned about future downturns?
- Buyers suddenly have renewed interest in the “freedom” of renting?
Wait a minute…when did the inherent freedom in renting come into the equation? When millions of people around the country became suddenly and irreversibly “stuck” in their homes because of plummeting values.
Stability, the defining characteristic and selling point of homes past, is suddenly its worst enemy. People want choices and control over their future, and the semi-permanent nature of home ownership is scaring them away.
That’s really a bummer, since home ownership still offers a ton of benefits you just can’t get with renting.
Tomorrow, my reasons for still wanting a home, regardless of the economic climate. Maybe one of them is yours?
Have you noticed a shift in the home ownership approach? Why do you think it’s happening?
Photo by Mike Licht
Fiscal Fizzle 
It’s still financially unaffordable for most people not in the housing market to get into a house. You can’t make any money on your savings, since interest rates are so low, and the required downpayment (10-20%) is incredibly high in most urban/metro environments.
Once you’re in the housing market, you’re in – but getting in is harder to do than it ever has been before.
Here’s a great article on the subject:
http://www.businessinsider.com/finally-people-are-talking-about-a-real-housing-market-fix-letting-prices-fall-2010-9
Agreed, and the latest loan demand numbers support that. Even though interest rates are at an incredible low point, so is consumer demand to tap those rates. 20% down is a tough proposition when most of us have been burning through savings just to stay afloat.
I agree that the 20% downpayment is a barrier. So is the other reality of this recession: things go south in a hurry and you need to be prepared. I’m 26, so I had just graduated and settled into a job when the recession started. Its not just that I need 20% for the downpayment, I also need an emergency fund that will cover the mortgage in case I get laid off at the start of a 2 year long recession. And even in 4 years of working, I’m maybe half way there. So, I will be renting for the next 2-4 years at least.
Great point. It’s even harder than it seems on the surface (a lot of people forget about the incidental costs of buying, the emergency fund, etc.). Good reminder to cross all of our t’s before we jump into the water.