Home ownership has been the quintessential “American Dream” for decades, adding the final step to the marriage, babies, and home-owning trifecta. As it turns out, people are still buying homes, but not in that order. Not even close.
According to Zillow.com, 60 percent of first time home buyers are single – a significant shift from 30 years ago when, in the 80s, less than half of buyers were single. According to Economic Analyst Cody Fuller, a cultural shift has taken place that is making people wait to make all major decisions in their lives, including the typical American Dream protocol.
“First-time homebuyers today are typically older, spend more time in rental housing, are less likely to be married, and are buying more expensive homes than they were in previous decades,” Fuller said. By looking at Zillow’s research, you can tell that it’s true.
For one, first time home buyers are older than they were 30 years ago (33 today – 30 then), yet they are making less money. Due to poor economic times (coupled with a housing market that is still coming off life support) many buyers have to wait longer to afford down payments on more expensive homes with less money to spend.
For example, the median cost of a house today is more than $140,000 with a median income being just over $54,000. That means houses are going for 2.6 times their income. Compare that the 1980s, where people were buying starter homes at 1.9 times their salary (and averaging higher pay). Since buyers are now choosing to go at it without a partner, it makes sense that the average buyer is now waiting more than six years before shelling out a down payment, even if reports say it’s now cheaper to own than rent.
Since a good amount of people are still buying homes, it’s safe to say the American Dream is alive and well – it’s just shifted its course.
