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The American Dream of owning a home on a 30-year mortgage and building up equity over the years...
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Thursday, June 2, 2011, 5:55 PM ETThe American Dream of owning a home on a 30-year mortgage and building up equity over the years is dead, Walter Mead writes - and so is an upwardly mobile lifestyle based on permanent debt. "Americans are going to have to save more and consume less, and the returns on home ownership are likely to stay low."
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Jerry
Perhaps that phrase will soon be applying to politicians and Keynesians alike.
Furthermore why is anyone correlating the American Dream with buying a home on a mortgage when buyer is required to be imprisoned and burdened with debt in order to own a home.
30 year mortgages are indeed long gone due in part from the government's most recent QEs and bailouts enacted that has in effect created even more debt.
"The early American opinions revealed five chattel mortgage
acts, adopted in 1755 for Georgia,13 1748 for Virginia,14 1729 for
Maryland,15 1715 for North Carolina,16 and 1698 for South
Carolina..."
And in fact the first recorded mortgage was in Roman times, under Justinian... www.wmitchell.edu/lawr...
The media distorts the term mortgage. A mortgage or deed or trust is a security instrument that explains the lender's rights to the collateral in the event of a Loan or Promissory Note default by a borrower.
Mortgages (the security instrument) have been around ever since attorneys were created. However, 30 year fixed rate mortgages are a relatively new financial instrument.
On the other hand, I own a home and even with the downturn in home prices, it's still worth twice what I paid for it. I like the stability it represents, and the separation and privacy from neighbors (a beautiful brick home on one acre). We have multiple gardens, lots of trees, abundant wildlife, and a hugh 500 square foot deck. Being home feels good. It will be paid off in another five years. Once that's done I have no rent or mortgage to pay. My daughter grew up in this home and she will own it when we're gone which will give her a jump start in life.
Homes do cost money to maintain, something the government didn't factor into their calculations when the NINA program and 130% financing were allowed. Many people without the means or the inclination to maintain a home were allowed to purchase one. I wish they would do that for cars and pickup trucks. I could use a new truck and I would love to get one for free.
For me, home ownership has been a large part of my American Dream and I wouldn't change that even now. I can't imagine what a 3,500 square foot apartment would cost me per month in Nashville.
People are welcome to their opinions. I have mine and the OP has his. His is no more right than mine or anyone else's.
For anybody old enough to recall, this is simply Jimmy Carter's "malaise" and "America must settle for less" recycled.
Another updated defeatist, nothing more.
Obama and his radical pals have already destroyed the nations credit rating, and should he be re-elected expect nothing more than a full out economic collapse and the end of America as we know it.
We'll come out of Malaise II.