Homeownership: From American Dream to Nightmare?

Before you go, we thought you'd like these...
Before you go close icon
american dreamBy Sheryl Nance-Nash

Here's more evidence that the foreclosure crisis has changed the way we think about homeownership's place in the American dream. Nearly half of those polled in a newly released survey said that owning a home today was a "nightmare."

Nearly 70 percent of those surveyed by Home Value Insurance Company believed home values had gone down in their neighborhoods in the past three years. Most either expect them to continue their descent (19 percent) or remain static (67 percent) in the next year. More than a third (37 percent) said buying a home is generally risky, and nearly 20 percent said they aren't sure they'd recommend homeownership to a young person.

According to the survey, the biggest risk that homeowners perceive is declining home values. There's plenty of reason to worry. According to newly released data on the third quarter from real estate site Zillow.com 28.6 percent of all mortgage holders owe more on their mortgage than their home is worth. There's more pain to come: Home prices are down 4.4 percent compared to the third quarter of 2011 and, Zillow predicts, prices won't hit bottom until 2012.

Whether or not the foreclosure crisis has upended the American Dream is a popular line of questioning for pollsters. And surveys don't point to a clear trend. Nearly 90 percent of those surveyed in June by The New York Times and CBS News said homeownership was an important part of the American dream, though nearly a quarter said their home was now worth less than what they owed on their mortgage. In September, 70 percent of those responding to Trulia's American Dream survey, still said they believed that homeownership was a central part of the American Dream, a level that had been unchanged since January.

The View From the Home Front

"I once looked at my home as my dream," says Alexis Booras, of Sadsbury Township, Pa. "Plenty of room for pets, a beautiful yard, quaint, perfectly sized Cape Cod in a very safe, family neighborhood. I didn't buy with the intention to sell; I planned to retire here, in my own little paradise."

"Now I fear that I won't even have my home when I'm 55. The state of this country, real estate and the economy has turned my dream into a nightmare of living in constant fear," says Booras, who was laid off from her $83,000-a-year job of 25 years in 2009, at age 50. She is still unemployed.

To Buy or Not to Buy?

So, is it still worth it to own a home? "Worth is a slippery slope -- subjective," says Michael Kay, a financial adviser and president of Financial Focus. "Redefine your values and make decisions based on them. The American Dream is being recast toward lifestyle, and not necessarily homeownership."

For those who remain undaunted by years of declining prices, Kay says, "Look at the worst case scenario. If you take out a variable rate mortgage, find out what's the maximum payment possible. Be ready to spend for maintenance. View the deal as you would any investment, but ask yourself, does it provide peace of mind, roots, sense of family-stability? Define your 'why' before walking down that road. Look at the numbers carefully. If it's a good deal -- go for it."

Also see:
Where Are the Real Home Bargains? Not Where You Think!
Mortgage Rates Stay Low, But Homebuyers Aren't Budging


11 PHOTOS
10 Cheapest Places to Retire
See Gallery
Homeownership: From American Dream to Nightmare?

Mean Housing Value: $63,000
Mean Property Taxes: $1,260
Sales Tax Rate: 7.75 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 84/55

Pictured left is a new traditional home for sale in Gregory, Texas, listed at a price above the town's mean home value. 

See more homes for sale in Gregory, Texas.

Mean Housing Value: $141,000
Mean Property Taxes: $846
Sales Tax Rate: 6.5 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 81/58

Pictured left is a ranch home for sale in Holly Hill, Fla., listed at a price close to the town's mean home value. 

See more homes for sale in Holly Hill, Fla

Mean Housing Value: $160,000
Mean Property Taxes: $800
Sales Tax Rate: 7 percent
Max Income Tax Rate: 5 percent
Summer/Winter Temperature: 84/48

Pictured left is a ranch home for sale in Long Beach, Miss., listed at a price close to the town's mean home value. 

See more homes for sale in Long Beach, Miss.

Mean Housing Value: $103,000
Mean Property Taxes: $2,163
Sales Tax Rate: 8.25 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 84/55

Pictured left is a home for sale in Ingleside, Texas, listed at a price close to the town's mean home value. 

See more homes for sale in Ingleside, Texas

Mean Housing Value: $49,000
Mean Property Taxes: $490
Sales Tax Rate: 6 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 84/66

Pictured left is a condo for sale in Pembroke Park, Fla. listed at a price close to the town's mean home value. 

See more homes for sale in Pembroke Park, Fla.

Mean Housing Value: $185,000
Mean Property Taxes: $1,850
Sales Tax Rate: 6 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 84/66

Pictured left is a three-bedroom for sale in Margate, Fla. listed at a price close to the town's mean home value. 

See more homes for sale in Margate, Fla. 

Mean Housing Value: $153,000
Mean Property Taxes: $1,530
Sales Tax Rate: 7 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 82/60

Pictured left is a remodeled home for sale in Largo, Fla., listed at a price close the town's mean home value. 

See more homes for sale in Largo, Fla.

Mean Housing Value: $123,000
Mean Property Taxes: $2,583
Sales Tax Rate: 8 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 84/52

Pictured left is a traditional home for sale in La Porte, Texas, listed at a price close to the town's mean home value. 

See more homes for sale in La Porte, Texas

Mean Housing Value: $189,000
Mean Property Taxes: $1,134
Sales Tax Rate: 7 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 82/60

Pictured left is a single family home for sale in Port Saint Joe, Fla. listed at a price close to the town's mean home value. 

See more homes for sale in Port Saint Joe, Fla.

Mean Housing Value: $61,000
Mean Property Taxes: $976
Sales Tax Rate: 8.25 percent
Max Income Tax Rate: 0 percent
Summer/Winter Temperature: 85/58

Pictured left is a home for sale in San Benito, Texas listed at a price close to the town's mean home value. 

See more homes for sale in San Benito, Texas.

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION
Read Full Story

Find a New Home

Buy
Rent
Value
Powered by Zillow

From Our Partners