Does the American Dream still have a chance amidst economic woes?
Find a job, get married, buy a house. It’s been the standard formula and the unquestioned dream for generations of Americans. But over the last thirty years, even with interest rates on the decline, first-time home ownership has been steadily decreasing among the young.
Between 1980 and 2000, the share of late 20-somethings buying homes declined from 43 to 38 percent. Homeowners in their early thirties dropped from over 60 percent to around 55 percent. That’s to be expected during the recent housing crisis, but what explains the pre-recession skittishness? And even now, with mortgage rates down, houses sitting empty and an increase of women in the workplace, Generation X would rather rent than buy. The ripple can be felt throughout the economy, from lowered property values and tax revenues to a slump in the construction and housing services industries.
Among the blame factors: rising student debt, a steady decline in the marriage rate and a rootless work force. And even if they could afford it, many millennials are watching their older brothers and sisters sink under the weight of ill-advised mortgages and asking themselves why they’d want the same.
How will this trend affect the overall housing market? Are you a young person – married or single – who has decided home ownership isn’t for you? Or a homeowner who regrets being saddled with a mortgage payment? Is this still the American dream?
Derek Thompson, business editor, The Atlantic