According to the National Quarterly Housing Survey, only 64 percent – slightly less than 2/3 – of Americans think that “owning their own home is a safe investment.” That is down from 70 percent at the beginning of 2010 and from 83 percent in 2003[1]. And while home sales rose in January 2011 for the third straight month, the median home price hit its lowest point since April 2002. What does this mean for homeownership as “The American Dream?” It could mean that that particular concept has run its course.

There are disagreements on the part of experts about whether or not this is a bad thing. Some point out that a shift in perception of homeownership will cause rents to rise and could lead to an adoption of the “common-sense, rational concepts disregarded during the housing bubble years”[2]. Furthermore, as renting becomes more acceptable, it could lead to a prevalence of more desirable rental options in which favorable locations, “multi-modal transportation options,” pleasing layouts that feel more like homes and “higher levels of aesthetic and construction quality” dominate the market and make both renting and ownership of rental units a pleasant and profitable experience.

Doug Duncan, Fannie Mae’s chief economist, believes that this change in perspective is going to lead to “the demand side increase [being] in the rental market, not the housing [purchase] market.” And some experts believe that since high rental vacancies have “weighed on the core consumer price index” that a new focus on rental properties and multifamily housing could help the economy as a whole. Do you think that it is necessarily a bad thing – in the grand scheme of things – if owning your own home is no longer considered part of “The American Dream?”

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[2] http://www.washingtonpost.com/wp-dyn/content/article/2011/02/25/AR2011022500045.html