The American Dream has always been coined as the dream of homeownership. Owning a home, raising a family, and being able to do the things one wants whether it be family vacations or investing, has always been that ideal for many Americans. In fact, the ability to create your own life and to live as you would like to is the reason that so many people came to America in the first place. What is it now though? Where is the American Dream heading?
Turmoil and Lending Limits
In recent years, the number of banks going under as well as a near depression has caused many people to be pushed farther away from this dream and idealistic place than ever. It is not uncommon for people to simply want to find the money to pay the bills, much less pay for a home. Here are a few things to think about.
- In some markets, the value of homes has dropped significantly since the real estate boom burst its bubble. The result is that people cannot simply buy a new home and use the proceeds from their current home to pay for it. It just is not possible because home values have fallen so much so. So, people are stuck where they are.
- Lenders have imposed stricter guidelines than ever on borrowing money to buy homes. To stop people from buying a home they cannot afford, many are now forced to come up with 20% down to even get a lender to consider them for a loan. That means that the borrower will spend more time renting until he or she can accumulate enough money to borrow to buy a home.
- The credit score of many Americans has fallen to record lows. It could be due to the dried-up credit markets or due to the number of foreclosures occurring throughout the country that wipe out a person’s score. This reduced credit score means that these individuals have less buying power overall.
So, where is the American Dream in 2011 and where is it headed? That is unclear at this point. Homeownership is still a priority of most people, but it may be necessary for many to remain in rentals longer or working harder to build upon that dream.
In many cases, experts believe that Americans will simply change their viewpoints. What was most important previously will become less important now. Having everything they want may be less of a demand and working to earn those benefits may become more of a reality. It goes without saying that ideals will change and that new ideas will become the most important factors possible.
Where is your American Dream heading? If you are not sure, it may be time to sit down and plan. In other words, this dream will be different for every person involved in the process right now. The definition of being happy is less likely to be centered on the accumulation of things but instead will be focused on building wealth the hard way.