There is no denying that housing costs in the U.S. have grown exponentially and have become so volatile, that a pillar of what is considered to be the core of the American Dream is continuously flying farther away from the hands that work so hard to achieve such dreams.
The median price of a house in the U.S. has quadrupled between 1940, the first year a census was taken by the U.S. Census Bureau, and 2000. Median price of a home in 1940 was $30,600 while in 2000 it was $119,600. While this data and trend analysis ends during the midst of economic downturn, Americans have seen vast fluctuations in valuations in their properties, making owning a home nearly impossible at times.
During the dot-com boom, property values became severely overinflated due to valuations and loan approvals that were based on non-traditional guarantees such as stock options and immaterial assets. With the bust that followed, speculative buying ensued by investors who purchased housing en-masse when prices plummeted, only to rent out and degrade neighborhoods, all in the name of profit.
The housing market has taken a beating, leaving those who are just trying to make ends meet in constant struggle. Now, in a complete turnaround from the lax loans that were freely awarded and consequently defaulted on, lenders have become extremely cautious, making it very difficult for many to get a loan to purchase a new home. This is in turn affecting the overall economy, because people are unable to take advantage of the financial benefits of home ownership.
Currently, it seems the economy is slowly crawling out of the turmoil that was incited by greed. Greed to make more money that was not rightfully earned. This is nothing new to economics in any country. All countries have entities who take advantage others and make money off the efforts of others.
Banks that were saddled with homes left by owners who refused to continue making payments based on valuations that were outdated, held on to investments and were equally bailed out. Now, they stand to make millions, probably billions, on sales as they slowly trickle the housing market at a rate that suits them best.
What is left is a marketplace of people awaking to find the American Dream vanishing before their eyes. This dream was so strong and prevalent and available to so many before the new millennium. However, people were different back then. Businesses ran differently back then. When the general public in the U.S. is unable to become financially independent and achieve greater spending power, this only comes back full circle to affect the nation’s economy.
When people work so hard to save up and own a home, only to find it be stripped away from their grasp because of false valuations and an marketplace that speaks to the bidding of billionaire moguls and an industries that quietly regulate the free market to their advantage, it becomes difficult to dream, think big, and hope for more. My only hope is that things go back to the way they used to be.