The American Dream, Myth or Reality?

The great American Dream has always revolved around owning a home। Sure, having the 2.3 kids, the cushy corporate job and the stylish car to drive to work everyday are part of the myth, but nothing quite summed up Americana quite like the white picket fence. But now that the housing bubble has finally burst, it is becoming, once again, much easier for first time home buyers to experience the American dream.

This is may be a piece of good fortune for first-time buyers who were recently priced out of housing markets all across the country. In addition, housing experts point to the drop in home prices in the last 2 years, as well as lower interest rates, as incentives buy now before rates go back up. However, stagnant wages during this period have remained the same।

According to data released by the United States Census Bureau, an increasing number of homeowners are spending a much larger share of their incomes on housing than in previous years। In 49 out of 50 states, people reported an increase in the amount of their incomes spent on housing. The only state that didn’t, Alaska, spent the same amount. The report showed that people are spending around 31 percent on their housing needs, up from 19 percent in 1999.

The current recession has had a huge impact on household incomes. The Census Bureau report showed that income has actually dropped, not risen, over the past 10 years, down 2.8 percent.

Maybe the worst news in the report was the percentage of people who allot more than 31% of their income for housing। National guidelines suggest that more than 31% of household income for housing is excessive and not financially healthy.

Things appear to be the worst in California। Not only do they have the most expensive real estate in the nation, 48 percent of California homeowners spend more than 31% of their income on housing related costs. Coupled with purchasing homes with risky loans, its no surprise California is within the top 5 states with the highest number of foreclosures.

Regardless of the bad economy, the opportunity to purchase a beautiful home at a reasonable price is now! It makes no sense to rent when the cost of owning a home is affordable right now. So, go find yourself a realtor experienced in REO (real estate owned) and short sale properties and start your home purchase journey.