Homeownership: From American Dream to Nightmare?

By 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.