White Picket Fences: Is the American Dream Dead? // Post #1 Is it Your Dream?

This post is part of a larger series on buying a home and I want YOUR input!

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What’s the first thing that you think of when you hear the term, the American Dream?

White picket fences? 2.5 kids? A house in the suburbs?

Americans grow up believing this dream and, regardless of whether or not we want it for ourselves, we assume it is achievable. I’ve got some bad news: In the 1940s the American Dream wasn’t as achievable as our cultural norms would have had us believe, but it is even less likely now. The average home in the U.S. costs $200,000 and significantly more in large cities. The average price in Los Angeles is $849,500 and in New York it’s $916,000. Compare that to 1940, when the average home cost $30,600 (taking into account inflation!). Can you imagine how great it would be if you could buy a home with a deposit of $6,120?!

One of the most frequent things I hear from clients is that they feel like they should be buying a home, but can’t figure out how to do it financially. My next question is always, “why?” Not why can’t you figure it out (that’s totally fair and where I come in), but why do you feel like you should buy a home? If it is because you want the independence, the ability to make significant changes to your living space or want to get a return on your investment, then buying a home could make sense. But if the reason is that it just seems like the right thing to do at this stage of your life, then that is a terrible reason to move forward with this kind of purchase.

Owning a home is a lot of responsibility. It is expensive, and for some (most) people, stressful. So step #1 is always to figure out if you really want to be a homeowner in the first place.

I never make decisions solely on the basis of a pro-con list, but they can be very helpful when trying to think through a big decision.

If you fall fully on the pro side, that’s great! The next step is figuring out why you want to own a home and how to make that happen (we’ll dive farther into that next week!). If you fall on the con side, that’s okay too! You are not required to own a home. And that old adage about paying rent = throwing away money? Not totally true. Although you can eventually own a home outright and not have to pay mortgage payments, you will always have to pay maintenance costs (which can be steep!) and taxes. And that other old adage about always being able to sell a home and make money off it? Also not totally true. That really depends on the market and your timing. Owning a home does not = living the American Dream. Bonus: think of what all you can do if you save up the amount you would have used for a deposit!