Buying a home has become an important way to build wealth. What to do when you can’t : NPR
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Rebecca Bush started her home hunt in January 2020.
“I thought maybe in the next few months I would find the perfect home, and it would line up when the lease ended,” says the 27-year-old. Everyone knows Taka
coronavirus. The housing market has been thrown into turmoil as a result of the pandemic. Home prices rose nearly 20% across the country between September 2020 and September 2021, according to the . real estate witchPeople were enthusiastic about buying homes, even though prices were skyrocketing. Housing shortages will continue to be a problem in 2023, even though there aren’t many homes left in the market and prices are slowly cooling.
Then inflation and the Federal Reserve’s attempts to combat it pushed some mortgage rates above 7%.
Between rising interest rates and having to compete with all cash purchases, Bush was in a pinch in making a real estate offer at his Tennessee home.
“Every time I’m beaten by someone who seems to come from out of town, the house is much more expensive than it’s listed. 50, 60 grand or more.” It’s something you can’t compete with.”
With a tight housing market and high interest rates, prospective homebuyers like Bush are feeling shut out, at least for now. But owning a home is still the cornerstone of the American dream for many and a key way to build wealth.
Suburbs opened up after the war
All the money Bush has been saving for her future home is just in her bank account. She is now thinking what she will do if she doesn’t buy her house soon.
“I’m wondering if I should find another place to build my wealth,” she says.
“Homeownership has been a central way to build wealth, arguably long after World War II and after suburban opening,” says Joint Center for Housing Studies at Four Harvard University.
After the war, like Moira Rogers, owning a home remains part of the “American Dream” for many in the United States.
Rogers is 50 years old and works as a real estate appraiser, just like his father.
“I love real estate appraisals and the American dream of owning a home,” she says.
Rogers is a single mother of four children, three of whom are her sister’s children. She helps take care of her children. Rogers was looking for her three- or four-bedroom house with a garden in California. But with over 30 years of experience in the appraisal industry, she felt the housing market would remain uncertain.
Moira Rogers
“That American dream and the idea of watching kids run into their bedrooms is really emotional, so it was really hard to hold back,” Rogers says. , had to go back to the core roots that numbers don’t work.”
Rogers moved the family to Alaska, where her sister’s children were first born, in hopes of making it more affordable than California. I live in a 600 square foot one bedroom condo.
“A closet has been transformed into a beautiful bunk bed that looks like a children’s book for our two little ones, ages 4 and 6,” says Rogers. “So every night I go to bed feels like I’m climbing my own little fort in a way.”
Moira Rogers
The only bedroom shared by a 12 and 13 year old has plenty of space that can be separated so that each has their own private space. Rogers sleeps on a foldout sofa in the living room.
She says the family may be able to upgrade to a larger home once the market stabilizes a little more. Meanwhile, they spend more money on travel and experiences than they do on their hefty mortgage payments.
“But it’s my own pie and a little slice of the American Dream,” she says. “And it’s a beautiful, beautiful slice. That’s for sure.”
It’s also a slice that doubles as an investment to help Rogers and her family build their wealth.
Tenants have other options for building wealth
Chris Herbrt says the wealth gap between homeowners and renters is “substantial”. For one thing, homeowners often earn higher incomes, so they can invest more money in their savings for other investments.
“The simple math of taking a mortgage and paying it off over time means there’s an aspect of forced savings over time,” says Herbert. “So, not only is the home valued higher, but it’s paying off that debt over time. Combining the two things, he said, home ownership yields savings and financial gains.” It’s been a great way to do that.”
Herbert says there are ways renters can build wealth outside of owning a home, citing stocks and bonds as one example. In some cases, this can be a better investment than a home, he says.
“Rentees can do well if they can put their money into these financial instruments. The returns on stocks and bonds over the long term are definitely higher than those on home ownership.” he says.
Still, Herbert is optimistic that the housing market will improve in 2023.
“We are probably out of our darkest times now. Interest rates should come down over the next two years,” he says. “Another reason for optimism is the amount of attention currently being paid to this issue from a policy perspective.”
Herbert said policymakers and leaders in the housing industry — from lenders and realtors to builders — see good reason to expand homeownership opportunities.
“[They] We’re looking for ways to provide new forms of credit and other support to make home ownership accessible to people,” he says.
Rebecca Bush has put her house hunting on hold and still hopes to own one someday. She grew up on her 60-acre farm so she could one day have her own place big enough to host her people and have a few of her own farm animals. I always imagined.
“I still have dreams that I might be able to buy a house,” she says. “But now I’m trying to embrace the idea that there might be something else for me.”
https://www.npr.org/2023/01/09/1147453685/house-housing-property-prices-to-buy-rent Buying a home has become an important way to build wealth. What to do when you can’t : NPR