We’ve all heard of “the American Dream,” but where did the phrase originate and when did homeownership become part of that idea?
First appearing in the book “The Epic of America,” author James Truslow Adams says: “The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”
Nearly a century since “The Epic of America” was first published, many of the ideas it espoused still hold true today. However, there have obviously been certain cultural, social, and economic changes since this book came out. The transformation of real estate and homeownership in our country is one such example.
Back in the 1930s, homeownership was reserved for the wealthy. It was only after WWI that homeownership became a symbol of the American spirit and a facet of the American Dream. Yet some have suggested that in the present, homeownership is no longer part of this ideal.
To understand why, we must examine the events of the last decade and how they have impacted our nation’s attitude toward real estate. Prior to the housing crash in 2008, obtaining financing for a mortgage was incredibly simple. Beyond that, many people were falsifying their income in order to afford homes that were beyond their means. This artificial demand dramatically drove up home prices while simultaneously reducing affordability—two factors that, as you likely remember, led to a market crash.
Thankfully, our market has since recovered. Real estate in 2018 is a very healthy industry, partially due to help from new rules and regulations put in place to prevent similar circumstances to what we saw a decade ago.
Nevertheless, some are still skeptical about the prospect of homeownership. Is it still a worthwhile pursuit? Actually, there are many benefits associated with owning a home today. Several of the advantages that first propelled homeownership into becoming a facet of the American Dream still exist.
The first advantage is the most obvious—when you own a home, it’s yours to do with as you please. Owning a home lets you plant roots on your own terms. It eliminates uncertainty in your living situation.
Secondly, real estate is a great long-term investment. By accruing equity in your property, you are building wealth and safeguarding your future.
The third advantage to homeownership is that it grants you the ability to leverage appreciation. If you purchased a $100,000 with a $20,000 down payment and that property doubles in value over time, you essentially gained an additional $100,000 in value for a comparatively small initial investment.
Finally, remember that whether you rent or buy property, the need you’re satisfying by doing so is the same. People need shelter, so why not own yours? When you rent, you’re essentially paying someone else’s mortgage. Buying a home and paying your own mortgage, instead, may make a lot more sense, and could be the right next step in your pursuit of the American Dream.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.