The New American Dream

Do you still dream of owning a home?

The definition of the American Dream has changed throughout history with its roots being founded on certain inalienable rights including "Life, Liberty and the pursuit of Happiness.” In recent history, homeownership became a symbol of the American Dream signifying the achievement of prosperity. However, every generation is often molded by their own experiences and the millennial generation is not any different.

The Study

A study was performed that shows that many Americans are now choosing retirement savings as their top financial goal. The millennial generation, young Americans born from the early 1980s to the early 2000s, had one of the largest shifts in financial priorities since the study had been released 3 years prior.

The study was performed by the National Endowment for Financial Education and was given as an online survey to over 2,025 American adults.

The Study’s Key Findings

According to the recent study conducted in April 2014, about half of Americans 18 and older have the top financial goal of having enough money for retirement. Women scored higher, coming at 53% and men came in at 47%.

Only 13% of American adults believe that owning their home is their top financial goal.

Today.com reported on the study, highlighting the millennial generation. Who are these millennials? The most recent generation to come into adulthood is the millennial generation from the ages of 18 to 34-years-old.

In 2011, twenty-six percent of this group reported that home ownership was their most important financial goal and 25% said it was retirement. However, in the study published this year, the number for retirement savings jumped to 29% and the number for homeownership as the top financial goal dropped to 21%.

What is The Reason for the Change?

Ted Beck, the president and the chief executive of the National Endowment of Financial Education, pegs the reason why these millennials are choosing retirement instead of homeownership is that,

"Americans seems to be finding reassurance in more long-term financial-security-based values rather than material values,"

The article names additional factors such as the housing meltdown and the increase student debt that many college graduates carry.

Homeownership is Still a Great Way to Build Wealth

While retirement saving is valuable and should not be ignored, homeownership is a great way to build wealth. Here are a two compelling reasons:

  1. At The End of the Day, Buying is Cheaper than Renting
    When you are considering long term wealth, buying a home is cheaper than renting. That has never been truer than it is today. Rent all across the country is increasing. For more information on this, please check out our recently published article, Are You Paying Too Much for Rent?
  2. Your Mortgage = A Savings Plan
    With every payment you make on your mortgage, you gain equity in your home. Trulia.com puts it this way, “A mortgage is like a forced savings plan.” It is as though you are being forced to save, which is a good thing.

Summary

If you dream of owning a home, but don’t know how you will get there, there is help. The FHA Back to Work Program or an FHA loan might just be exactly the help you have been looking for. For more information about these two programs, please visit the articles below:

If you are ready to starting looking for a house, please give our office a call. We would love to help you realize your dream of owning your own home.

248-348-7200