The American Dream takes many forms: opportunity, personal fulfillment, a financial safety net and secure retirement. Home ownership is also part of the popular definition, and while that aspect of the Dream has taken some hits during the housing bust, it remains alive and well—though with a twist.
The vast majority of Americans (79%) say the recession has caused the country to rethink the reasons for owning a home, according to a new Coldwell Banker Real Estate survey. The real value in home ownership is emotional—not financial, respondents widely agree. That is in sharp contrast to views held before the bust. Some 90% in the survey said that people bought more expensive homes than they should have and 86% agreed that people are no longer willing to stretch for a bigger house.
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“Americans now recognize that they don’t need the biggest, most ornate home on the block,” says Robi Ludwig, a New York-based psychotherapist who partnered in the survey. “Rather, they can and should live within their means.”
This has potentially huge implications for the housing recovery, which has come in fits and starts this spring. The era of the McMansion may be dead, at least for now. Buyers are less concerned with leveraging into a home that will one day turn into a nest egg; they are looking for something they can easily afford and which reflects their personality and core values. In the survey, 71% said that their home is an expression of their identity.
“Our homes help to define who we are, partly because we have to ask ourselves a lot of really honest questions, including what we want in life and why,” says Ludwig. “Everything in and about our homes, from the color of our walls to our family photos, is an expression of ourselves and our family.” She says homeownership is in our DNA. “We are territorial by nature, and our homes are our place we feel rooted, safe and secure.”
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This is something of a back-to-the-future shift, says Jim Gillespie, CEO of Coldwell Banker Real Estate. “It’s only been in the last few years that the conversation has shifted almost entirely to the financial aspect of homeownership,” he says. For prior generations a house has always been about having a decent place to live and raise a family. He believes reverting to this more fundamental sense of home will cement ownership as the American Dream and underpin the recovery. According to the survey:
- 85% of Americans always dreamed of owning a home
- 78% of homeowners say owning a home is one of their greatest achievements
- 95% of Americans feel it’s important for their children to own a home someday
- 93% of homeowners and 89% renters feel homeownership is still part of the American Dream
- 83% of renters say they want to own a home someday