One of the milestones in many Americans’ lives is to buy a home. For decades, the American Dream has revolved around owning a house. Having a mortgage has long been considered a sign that you are on the “right track” financially.
However, after the housing market bust a few years ago, and with technology increasing the mobility that many Americans have, being “tied down” to a house might no longer be the real American Dream.
Exchanging a Mortgage for a Lease
Ever since the housing market bubble burst, many Americans have been exchanging their mortgages for leases. In some cases, there isn’t much choice in the matter. When real estate prices dropped, and when mortgage loans re-set, many found they couldn’t afford their mortgage payments. Foreclosures have forced many Americans to turn into renters.
However, there are some that choose not to own a home. Paying a mortgage is low on the list of the priorities, especially since having a mortgage can be limiting. Here are some of the reasons that some prefer to pay rent, rather than make monthly mortgage payments:
- Don’t want their money tied up: It’s still possible in many markets to rent a place for a lower monthly payment than what a mortgage payment would cost. Instead of putting that money into a home and tying it up, some prefer to have the money available for spending, saving, or investing.
- Concern about the risk involved: The housing market bubble taught many that real estate isn’t a “sure thing.” Many think that homeownership is too risky. Instead, the preference is to avoid sinking money into a huge asset that could turn out to be a liability.
- Want mobility: When you have a mortgage, you are kind of stuck. When the real estate market is tough, it can be hard to sell your home. Whether you are planning to move for a job, or whether you want to “upgrade” to a larger house, it’s hard to get rid of your house. And what if you want to travel? More and more people are telecommuting and finding that their work doesn’t have to be location-dependent. So, why should permanent living quarters be a part of life?
- Can you ever really “own” your home?: Another issue is the debate over what constitutes “owning” your home. As long as you are making mortgage payments, you don’t have to worry about foreclosure. But can you say you own your home when the bank can take it away if you don’t make mortgage payments? And others point out that the government can take your home for a number of reasons — even if you have paid off your mortgage. How stable is “ownership” when there are mechanisms in place to take the home away?
For many people, the American Dream is shifting away from homeownership. Instead, many people view the American Dream as being able to choose their lifestyles, and make decisions about who they want to be and where they want to live. It’s not so much about having something specific, like a mortgage in a nice subdivision, and more about creating a lifestyle.