Owning a home has long been a part of the American dream, but, of course, home buying has gone through a tremendous financial upheaval in recent years. As a result, are we seeing this part of the American dream change? N.C. State University economist Mike Walden responds.
“Well … I don’t know about dreams, but we do see some big changes in the statistics. The home ownership rate — that is, the percentage of households who own a home — actually have been rising for several decades. It got up to almost 70 percent, 69 percent prior to the recession. But over the last four years it’s dropped. So it’s gone from 69 percent down to 66 percent.
“And I think several things are behind that: One, of course, is the recession, the tightening of borrowing standards. … With unemployment being high, people, I think, are fearful of perhaps committing to a big mortgage in order to buy a home.
“And then I think a big factor is the fact that, unfortunately, home values are still going down. So I think people are still looking at a home perhaps not as the kind of investment that it used to be. And some people quite frankly may be saying, ‘Hey, I’m going to wait to buy a home because the price may go down even further.’
“I do think … that once we see some stability in home values and once we see a further drop in the unemployment rate, we may see that home ownership rate trend change. We may see it go back up. But for the moment, it looks like renting is much more back in vogue.”