The American Dream Threatened

Have Americans given up on the dream of having a “home” to call as their own? With the buyers facing erratic trends such as tight inventory, rising mortgage rates, and falling affordability, the dream is now perceived to be cooling down as the real estate trend dwindles in comparison with the 2013 recovery.

"The dream of homeownership remains very much alive and well, but these aspirations must also contend with the current reality, and in many areas, conditions remain difficult," said Zillow's chief economist Stan Humphries.

As per current inventory, the availability of affordable commercial real estate has declined to 4.7 months’ supply of homes compared to a high of six previously. Mortgage rates are currently pegged at around 4.2 percent nationally, up from lows of 3.3 percent last year, which makes it quite unreasonable for lower income and first-time buyers. With such figures, the thought of owning a home is slowly becoming an unrealistic idea.

In addition to the mortgage payment scale, lenders are also making things difficult for first time buyers. Lenders these days require solid and unquestionable credit scores, well-documented incomes and job histories, as well as sizeable down payments, to qualify for the best mortgage deals.

The optimistic thing, though, is the unwavering mindset of some who are still confident that they will own a home this year or within the next 12 months according to a survey conducted by Zillow, an online real estate database. If that will materialize, there will be millions of home owners this year and will translate to considerable sales figures to the real estate industry. The efforts of most real estate agents to maintain this rhythm flowing in the industry just to keep the “American Dream” alive and contagious, is truly commendable. But it’s not enough.

Recession or not, the American dream of having their own home remains promising. The rebound of the Real Estate industry may not be as constant but the “Dream” to most Americans is and they are very optimistic that it will be realized. Soon.