I suppose one could argue that the American Dream of homeownership has taken a few hits of late. Homeownership rates have fallen to their lowest levels since the U.S. Census Bureau began tracking rates in 1965 — rates are down to 62.9 percent of U.S. households, down from the all-time high of 69.2 percent in 2004. The new federal tax reform law has watered down the beneficial impact of the mortgage interest tax deduction and has placed limits on the deductibility of state and local taxes, which will certainly not boost housing affordability, particularly in high-tax states. These and other trends then beg the question: Is homeownership still part of the American Dream?

Well, it turns out the homeownership dreamers are alive and well, thank you! A recent study of aspiring homeowners by the National Association of REALTORS^® (NAR) revealed encouraging signs that nonhomeowners — who are those who rent or who live their parents’ basement — still value homeownership and consider it as a critical part of their American Dream.

The NAR study was conducted throughout 2017 and included a cross section of all households in the country. Of the total households surveyed, 63 percent were homeowners, 28 percent were renters, and 9 percent lived with someone else. Of those who didn’t own a home, 46 percent were 34 years old or younger, 57 percent had incomes of under $50,000, and 41 percent lived in suburban areas.

Both owners and nonowners thought the real estate market was strong, voicing the opinion that this was a good time to buy a home. Current owners felt better about the market than nonowners, 79 percent to 58 percent. But what was most important is that both groups said they strongly consider homeownership as part of “their” American Dream. Ninety-one percent of owners and 80 percent of nonowners felt this way, and that’s a very good sign.

Digging a bit deeper into those aspiring homeowners, the main reason they didn’t already own a home was because they couldn’t afford it. Fifty-six percent cited the cost of homes as the main barrier to ownership, while 25 percent said they currently needed the flexibility of renting for reasons such as job mobility. Another 10 percent said they just didn’t want the responsibility of owning a home right now.

The bottom line and good news here is the dream is alive. A whopping 82 percent of nonowners want to own a home in the future! When asked why, 32 percent of aspiring homeowners said they wanted to own a home to meet anticipated changes in their lifestyle, such as getting married, having children or retiring. Other triggers that would make them move from dreaming to buying include improvements in their financial situation (30%), a desire to settle down (12%), or a better, more stable employment situation (11%). 

But while the dream is strong, many renters looking to own lack the requisite savings to make the dream come true. Thirty-six percent of nonowners said saving for a down payment would be very difficult given their current financial situation. As you might expect, this was particularly true with younger nonowners. Forty-seven percent of Gen Xers said saving for a down payment posed a significant financial hardship. 

Since this survey concluded, the market has certainly evolved, which may change some of the attitudes of respondents. For instance, we’ve seen well-publicized increases in mortgage interest rates and worsening inventory shortages. We’ve seen trepidation and angst over the new federal tax law that may or may not cool the zeal to own. But through it all — the housing “bubble,” the Great Recession, as well as the long economic recovery — the dream of owning a home seems to be alive and well and living in America.