Home Ownership: The American Dream Revisited

From the earliest days in our country, owning your own home has been a goal of almost every American or at least it seems that way. From the time that the first settlers landed at Plymouth Rock in 1620, setting up and having your very own place to live was something that each family did and they focused all their attention on it. Of course, they had to build that shelter back then, unlike today when we can just look around the part of the country we want to live in and pick a house from the neighborhoods we like and can afford.  Many of us have done just that, more than once, myself included. It’s the biggest most expensive thing you can ever buy. But, is it still what everyone wants today? Has the American dream of home ownership started to slip away?

Home Ownership: The American Dream Revisited

My First Home

I bought my first home, a brand new 2 story colonial with 4 bedrooms and 2½ baths back in 1976 at the age of 26. I had always known that I wanted a house. After 3 years of marriage and cramming into a 1 bedroom apartment, we decided we could find that dream house if we just moved south of where we were and just a little further away from our jobs. We thought we were well planned in our strategy, we both had jobs, and we were young and “upwardly mobile”. We had saved $10,000 in three and a half years of marriage and we wanted a bigger place to begin raising our family-to-be. Sounds like the script to an American classic movie, doesn’t it?

Based on our limited knowledge of the entire scenario, we decided to look in a part of central NJ where new houses were springing up all over the place and the housing market was booming.  Houses were going in some areas for about $30-$50,000 base prices depending on bedrooms, baths, square footage, and lot sizes. We figured that we could afford that and the mortgages rates were about 9%.

Checklist for Success

We followed what I call the standard checklist that is still what a lot of people do today, some 40 years later and that is:

  1. Get all our supporting documents together like tax returns, W-2’s, paystubs, and such to have at the ready to show the banks and mortgage companies that we could afford a home of our own.
  2. Checked the Sunday papers for home ads and contacted a realtor to help us find properties that we might be interested in looking at.
  3. Ran a check of our credit report to make sure it was correct and our scores were at good numbers (I’ve almost always had excellent credit since I started working).
  4. Had my down payment money ready to go when we found the right place to buy.
  5. Built up a cushion of 6 months’ funds to handle any maintenance repairs, construction, or emergency issues for our new place.
  6. Test drove the routes we would need to take from central NJ to our employers as well as the train and bus availability.
  7. Tried to time our apartment lease renewal and home search so as not to be “homeless” or have two places of our own without being ready to move.
  8. Started spending every weekend looking at homes and models.

The process didn’t take that long, about 3 months, and of course we decided on a place that was just at the top of the chart of what we could really afford. We had to put all of the funds we had saved as a deposit to avoid PMI (private mortgage insurance) so we could save money and not have to escrow our taxes in advance of the due dates.

Being a Homeowner

The move went smoothly and it was about 3 months later, after setting up our new place that I began to realize that I would be in debt for at least 30 years (until after the turn of the century). I had become a slave to the ¼ acre that I now called my very own.  I had done it, got a piece of the pie, my very own home.

Now let me quickly add that I have had 4 of my own “homes” over the past 40 years and each time I made a change, there was a good reason to do so. But even though I changed my home, the feeling never changed. I was proud and felt that I wanted, no, needed a home of my own. I didn’t like renting for lots of reasons, like having no equity, not being able to make it really mine with alterations, etc. Not having the roominess, and a biggie, with my own home I had my very own grass lawn and vegetable garden. I do have to admit though, that after I turned 45 or so, the thrill of cutting and maintaining the lawn and vegetables did wear off. That’s when hiring someone to do that becomes a big deal.

So a big yes to all the cliché’s about owning your own home. Except for one thing that happened. It was the year 2008 and the housing market collapsed.

The Tide Turns

When the housing market slammed millions of people and their sub-prime mortgages, that’s when the American Dream suffered a massive coronary. People had blindly and recklessly “bought homes as a great investment opportunity” and believed in the out of control appreciation that houses had enjoyed for years and years. Suddenly they found out that that the bubble had burst. With the bursting came a mess of homes going underwater that even today, almost 10 years later, haven’t recovered. The home values are still down from what they were and people still have negative equity and foreclosures continue. Home buying has become much less attractive that it ever has been. And that is why I raise this next question.

Is the American Dream Dead?

My research tells me that for our next generation, the desire for home ownership has either declined or at best been postponed. Millennials seem to have a totally different idea and expectation then that of their parents and grandparents had about life and lifestyles. They are more transient and plan on that to fit their job and lifestyle. They are more comfortable with the idea of apartment dwelling and seem to prefer the city and its excitement and convenience to culture and entertainment than to the open space and “ponderosa” of suburbia.  At least for now they do. They are experiencing delayed marriages and families as the birth rate, the number of children they have and will have, is declining.

I’m guessing that money is involved, and is a great part of the decision to postpone ownership, family, and part of what was the historic core of American values.  For many, career and job opportunities have slowed down over the past decade. Salaries have been stagnant. Layoffs, unemployment, and the jobs exiting our system to overseas are serious problems.  College has become a virtual necessity and post graduate degrees almost as much of one. The costs for that and the loans involved are enough to make anyone cringe and thinking about taking on another huge debt at any age is dangerous. Despite an inner desire to someday own a home, the current situation doesn’t look like it will change anytime soon.

Final Thoughts

Perhaps home ownership just doesn’t fit in to the 21st century. It may be that the money that went into owning a home and building equity has evolved into a new type of building personal wealth through saving money, side hustles, alternative streams of revenue and even investing in other types of equities to a much greater degree. The education that the next generation is getting and the financial responsibility they are learning can replace the 30 year endeavor to build one’s wealth with long term property investments. But will it prevent the feelings and emotions that pride of ownership brings?

Do you wonder if we may have seen the end of this American dream? Do you think that it may be just a blip on the radar screen and it may come back full circle? Is it even important at all? Can you feel financially fulfilled and experience financial health and wellness without having equity in your home and the pride of homeownership?


  1. If I had to do it over again I would still own a home, but I would have not refinanced or taken out a second mortgage to perform upgrades.

    My oldest son has expressed interest in owning his own home. My advice to him would be buy small, only a 15 year mortgage and a make sure the monthly payment is no more than 25% of his take home pay.

    It will be interesting to see the paths my three children take in the coming years.

    1. I think taking a 25% approach is conservative, and that’s good. One of the problems that has been pointed out to me is that new starter homes are not becoming so available because they’re not as profitable to builders. It will take a little searching to find a really good one. Your kids will probably need your help with that. Thanks, Brian.

  2. We own our home and probably always will, but I think most people don’t realize the time, blood, sweat, and tears (which can be replaced by buckets of money) that go into maintaining a home and yard. When water starts dripping from the upstairs bathroom through the kitchen ceiling, there’s no property manager to call anymore.

  3. Jack

    Pros and cons to any lifestyle choice.

    Ownership = no moving due to lease expiration & rent hikes vs lack of flexibility

    Personally, I bought my first home in my early 30s and am very happy with owning a home – forced net worth building by mortgage payment and capital appreciation, and the mortgage interest deduction is a nice perk.

    I’m worried today’s younger generation is going to wake up on their 40th birthday renting and broke.

  4. I think it all depends on rather or not the next generation is traditional in a sense. My peers and myself included want to own a home…younger millennials not so much. As an older millennial, even with student debt, I didn’t delay buying a home because the cost of homeownership is much cheaper than renting in my area.

  5. Liz

    It’s always ironic to me when someone writes about something I’ve been mulling over (and have even written a post discussing similar things – it’s scheduled for September). Anyways, I don’t think the American dream is dead. I think a lot of us still want it, but we’re a bit scared of it. I also think, from a military mindset, that the American dream is still very real and many men and women who qualify for VA loans very much want to use them.

    My husband and I find ourselves in a bit of a predicament right now. We really want a home. We’ve been renting for 3 years now and hate having people on top of us, no place to play with the dog, and no garages. We live in the Denver area where you get less for renting than you would buying a home.

    We’ve thought about it a lot, and even though we may not be completely financially ready, we REALLY want to have our own space to pour blood, sweat, and tears into.

    I don’t know. We just hate throwing our money away on skyrocket rent prices.

    1. Liz, I really appreciate your comments. One of the hardest decisions to make is to go from the “I want” to “I just did”. This is a great time to consider buying because of the low mortgage rates (especially since the Brexit vote). It might be worth it to you to crunch your numbers and see where you can make up the monies that you need to get that house (hopefully you have some down payment money saved). You can probably do it with a little sacrifice and you won’t regret it in the long run.

  6. Emily @ JohnJaneDoe

    We own our home, and I don’t regret it. We also have rental properties and think that trends support being landlords long term. After all, if people aren’t owning, they are renting.

    A couple of things, though, make me wonder about the real whys of the current trend toward renting and owning, at least in our area. One, builders don’t seem to be building many starter homes. The margins are better on bigger nicer homes, so that’s what they build, but that prices out many folks who might want to buy but don’t want to buy an older home that might have a lot of repair issues. So I wonder if home ownership declines are a supply issue more than a demand issue, and what that will do to housing figures and the rental market later on.

  7. Pretty sure our home will end up costing us around $100k to renovate when all is said and done, just a LITTLE more than I thought when I planned on doing a lot of the work myself 😉 I personally would really like to keep this home and buy a second home. Then I would rent out our first home and, decades later when the mortgage is paid off, have cash flow!

    1. On your first point, it somehow always works out to be more than you think it will to do a renovation. But the good news for you is that if you work that out, and move on to your second property, you’ll be in a great position for building your income and wealth. Good luck and thanks for your comments.

  8. I don’t have any desire to own a home. It seems like a gigantic financial weight. If I did buy, I’m kind of into the tiny home ideas and I’d love it if I could mainly solar power it/find a way to live as off the grid as possible. I think a lot of my peers though don’t have the same feelings. I think most would like to be able to buy a house but aren’t in a position to do so financially. Student loans are no joke.

    1. Mel, I understand exactly how you feel. And there are many in your generation who are on the same track. Keep in mind that home ownership, in addition to being a financial burden, in the long term can build security and wealth. It’s all a matter of what you personally want and are comfortable with. It’s unfortunate that student loan debt holds so many people back from this.

  9. There was one point in my life where I had buying a home envy, but I don’t anymore. I like not be saddled to one location or property. Sure there are some tradeoffs, but everyone I know who owns a home seems like they are always in home renovation hell. It seems like the work is NEVER done. I like coming home and never thinking about it. That being said, I do really want a washer/dryer on the premises at some point, but it will probably be with a rental.

    1. It was many years ago, Tonya, when I first noticed that people spent almost every weekend at the home stores buying and renovating on their weekends. I was never one to do that, but if you own your own home, you’re either doing it yourself or you’re paying someone else to do it for you. There are definitely some advantages to renting and that’s a big one.

  10. Everything I have read or heard says my generation and my sisters generation aren’t interested or are postponing home ownership. Statistics where I am (Australia) also show the cost of a home vs income of now vs when my parents were buying is shocking. The average mortgage increased 790% in the last 30 years vs income only increasing 316%.

    It is becoming increasingly harder to purchase a home which I think is one thing contributing to my generation not wanting to buy. Life is to be lived, there is so much else you can do and when facing massive debt, it’s unappealing.

    I have owned and sold it in my divorce. I currently rent and will go back to owning in the coming 1 to 2 years because I like being able to do stuff to the home without having to ask. I like having roots somewhere. I am unlikely to stay in the location long term though and instead the home will be an investment property over time.

    1. Thank you, Kylie, for a very good explanation of what is the root of younger people not buying a home. I think there is a desire if you exclude the problem that money presents. We all want to have some stable place in life that we can call our very own, but the financial issues today are much greater than they were years ago. I guess we’ll have to see how this all plays out over the course of the next generation.

  11. Know Latoya already hit this, but I think you’re spot on about delaying marriage/family. While road schooling is all the rage, I think when push comes to shove most of my generation will settle down. Though coming of age during a recession certainly didn’t help starting salaries.

    1. Thank you, Femme. Although I’m only guessing at what the future may hold, I think it’s kind of built in to our culture to be settled down. Generation Y seems to be in the crossroads of wanting it all but also being very independent. The financial problems of the last (current?) recession is certainly not helping anyone to feel comfortable about the future, and that’s a problem.

  12. Pia @ Mama Hustle

    I’m a youngish millennial (I’m 25) and just bought my first house. We were very conservative with our purchase – we purchased a house we could afford on my salary alone.

    For me, it wasn’t so much that I desperately wanted my own home, as much that it is so much cheaper than renting here. Eventually, I’d like this property to become a rental property, and to acquire some additional rental properties as part of my portfolio.

  13. As a millennial, I myself bought a home several years ago and it turned out to be one of the worst decisions. We used a zero-down VA loan and had no equity. We didn’t have the home properly inspected and bought a bit of a turd, and it has sucked all of our disposable income (and more!) away in repairs. We’ve been trying to sell it for two years, but no one will buy it so it is literally our ball and chain keeping us from getting ahead financially.

    My issues aside, I have seen a lot of young people like me shy away from homeownership. Many young people are attracted to cities now, and home prices in a lot of cities are crazy (a starter home in my city is $300,000 – which, if I were able to save a 20% down payment, would still leave me with a mortgage that is 70% of my monthly take-home pay, even though I have a have a master’s degree). Coupled with student loans, it’s just not realistic. And I think the 2008 crash scared people away as well. Why risk putting yourself over the edge for something that might crash?

    1. Lindsay, it sounds like your American dream is a nightmare, and I’m sorry to hear that. If there’s anything good coming from this, it’s 1) you have learned a good lesson and 2) you are still at an age where you can financially recover. Sometimes you learn the hard way. I have and it sucks. Your explanation as to the thinking process of young people today is right on.

  14. I think as they become settled in life, they will want their own homes, though they may not want a McMansion. The main thing I hope my kids realize is that it is so much easier to pick a less expensive house and save $300/month on the house payment than it is to cut $300 in other expeneses.

    1. A starter home is definitely the way to go and you can always move up as your financial health improves. The problem today is that finding a really nice starter is difficult. I do agree that someplace inside, younger people do want to have roots. Their financial challenges seem to be the stumbling block. Thanks so much for your comments.

  15. Things have definitely changed over the decades, but home ownership is still something that I believe most people hope to achieve. With that said, it just might look a little different. I write a lot about small and tiny houses and I think for some younger people, the thought of owning a small house without having a hefty mortgage is more enticing than owning a large home that requires lots of maintenance and a 30-year debt. It just really depends on each person’s circumstance.

    1. Little House, I believe you are correct with your assessment. A house is a house, no matter how small it is and you can call it your own. The financial challenges that young people face today is very different than what I faced. I always felt that I was going to do better than my parents and have “the American dream”. I’m not so sure that Generation Y believes that.

  16. My guess is that most people will still ultimately want to own a home but that many will delay the purchase, just as they are delaying marriage and family. Once that first baby arrives, I think there is still a real desire to live in a house instead of an apartment, and home ownership suddenly gains a big appeal. (I sometimes forget how significant the housing bubble burst in 2008 was. We didn’t experience it in Canada as dramatically has the U.S. did. I’m surprised that some houses still haven’t regained their pre-2008 value. Ugh!)

    1. Prudence, an excellent point about the arrival of children and the desire to have more space, especially with a home. As far as the bubble goes, there are still serious problems in many areas of the US and it does not appear to be resolving any time soon. Foreclosures are still very high in many states.

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