Times Are Real Hard! 52% of Americans Struggle To Pay For Their Homes
More than 50 percent of U.S. residents are struggling to cover their rent and mortgage payments. They’re getting second jobs, cutting back on health care, holding off saving for retirement — and even picking up and moving to the “bad side” of town, MarketWatch reports.
That’s right, a whopping 52 percent of Americans had to make at least one sacrifice to pay off their homes in the last three years, according to a report, “How Housing Matters Survey.” House prices have soared by 20 percent in the last two years, according to Lawrence Yun, chief economist at the National Association of Realtors. Wages, on the other hand, have barely moved an inch.
“Affordability issues are real and a major hurdle,” Yun said.
Homes are tiptoeing their way up, price-wise, because there’s shortage of properties and lots available. It doesn’t help that inventory is being snapped up by wealthy out-of-towners. The competition for what’s on the market is stiff.
It’s not the mortgage rates, per se, that’s dragging Americans down — it’s hefty down payments, poor credit, and strict lending measures that are eating away at housing affordability. Oh and unemployment, too: “Young people are particularly at the mercy of landlords, studies show, and are still struggling to get jobs,” MarketWatch adds.
Apartments have become less affordable in recent years, too. “In fact, 50% of U.S. renters spent more than 30% of their gross income on rent,” MarketWatch added. Just blame the landlords: Between 2000 and 2012, they hiked up rent by six percent while incomes dropped by 13 percent.
What’s interesting about the How Housing Matters Survey is that Americans seem to be revising their vision of what the “American Dream” looks like. Maybe it’s not a colonial manor with a white picket fence or an expensive condo in the heart of Manhattan. Nearly 60 percent believe “renters can be just as successful as owners at achieving the American dream.”
Four-in-10 Americans say owning a home is no longer an “excellent, life-long investment.”
Darem Blomquist, vice president at real estate research firm RealtyTrac, would agree with that last statement. And that’s because the aftermath of the Great Recession looks like this: 7.5 million lost their homes to foreclosures and 9 million owe more than what the property is worth.
“If one looks at the last seven years as a predictor of housing market behavior in the future, it certainly should give one pause about whether buying a home is a good investment or not,” Blomquist said.
Another expert says that it’s wise to side-eye homeownership with “skepticism” and “trepidation.”
What do you think? Is the economy too unstable to invest in a home?