The American Dream of owning a home on a 30-year mortgage and building up equity over the years...

The 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."
Comments (18)
  • cynic2011
    , contributor
    Comments (660) | Send Message
    this is what is known as the Law of Indefinite Extrapolation.
    2 Jun 2011, 06:01 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (9654) | Send Message
    These are the kinds of statements that signal the optimal time to buy a house. Weren't the experts suggesting people load up on houses in 2006?
    2 Jun 2011, 06:04 PM Reply Like
  • User 487974
    , contributor
    Comments (1101) | Send Message
    Lower your cost of living however you choose/can and live like a king. Move to a state that is more taxpayer friendly. Your choices are there, they may not be your first choice but you may need to consider them all the same....
    2 Jun 2011, 06:11 PM Reply Like
  • Bouchart
    , contributor
    Comments (1101) | Send Message
    I never liked this notion that the American Dream was about paying off a mortgage, especially since some people have legitimate reasons for not wanting to own a home.
    2 Jun 2011, 06:17 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3498) | Send Message
    Not until after WW2 did housing prices outpace inflation. A home in Amsterdam today, when adjusted for inflation, is about the price today then in the 1600's. The statement above is pretty obvious, but then I have depression era parents.
    2 Jun 2011, 06:22 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
    " and so is an upwardly mobile lifestyle based on permanent debt."


    Perhaps that phrase will soon be applying to politicians and Keynesians alike.
    2 Jun 2011, 06:45 PM Reply Like
  • beantowntrader
    , contributor
    Comments (52) | Send Message
    The American Dream is to own a home and is not to pay down a mortgage. House prices have sky rocketed hence mortgages were created. I do not think mortgages existed in the being of time as so many US economists wants us to believe.


    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.
    2 Jun 2011, 07:11 PM Reply Like
  • Windsun33
    , contributor
    Comments (4431) | Send Message
    "...I do not think mortgages existed in the being of time as so many US economists wants us to believe...."


    "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


    And in fact the first recorded mortgage was in Roman times, under Justinian...
    2 Jun 2011, 07:50 PM Reply Like
  • j4thelonghaul
    , contributor
    Comments (22) | Send Message
    Look up the definition of chattel. Your quote wasn't about a mortgage on a house but most likely related to loans on movable personal property and my guess is those acts related to slavery.


    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.
    3 Jun 2011, 04:28 AM Reply Like
  • DVW
    , contributor
    Comments (156) | Send Message
    Look on the bright side, you'll always owe property taxes!
    2 Jun 2011, 08:13 PM Reply Like
  • Mister Ed
    , contributor
    Comments (591) | Send Message
    I wouldn't agree that home ownership is the key to The American Dream. I would say that it is one key that fits a particular social group. There are no doubt other keys to achieve The American Dream. This is a great example of how Government intervention can ruin anything. They will never learn.


    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.
    2 Jun 2011, 08:26 PM Reply Like
  • cynic2011
    , contributor
    Comments (660) | Send Message
    Wrong-the guy who turns out the be right will be right.
    2 Jun 2011, 08:54 PM Reply Like
  • desertlizzy
    , contributor
    Comments (4) | Send Message
    What a cynical thought. Makes me think to salvage everything I have acquired as best can in this economy. Doing over is/was not in the script. Thanks to America's help through investing (in the Dream) with the Banks who led us all to believe they are conservative financial strongholds that we the people can depend on for loans. Ha ha!
    2 Jun 2011, 09:38 PM Reply Like
  • Tack
    , contributor
    Comments (16267) | Send Message
    Jimmy Carter lives! (I mean figuratively)


    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.
    2 Jun 2011, 11:41 PM Reply Like
  • KashMoneyKapital
    , contributor
    Comments (433) | Send Message
    I think we really fucked ourselves good this time around.


    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.
    3 Jun 2011, 01:22 AM Reply Like
  • Windsun33
    , contributor
    Comments (4431) | Send Message
    Thoough the Obama administration has been flopping around like a blind fish, they are just the end result of a long line of stupid decisions.
    3 Jun 2011, 05:12 AM Reply Like
  • Tony Petroski
    , contributor
    Comments (6356) | Send Message
    Tack is right. We heard the same stuff during Malaise I, turn down your themostat, curl up in the fetal position because we are out of fossil fuel. The only difference then was that we were warned of global cooling and killer bees.


    We'll come out of Malaise II.
    3 Jun 2011, 07:40 AM Reply Like
  • Windsun33
    , contributor
    Comments (4431) | Send Message
    We were lucky, global warming came along and killed the killer bees.
    3 Jun 2011, 07:46 AM Reply Like
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