The sunset of the American dream: a massive rise in housing prices is killing the dreams of average US citizens

Prices for housing in the United States soared to unprecedented heights (it’s almost impossible to find a house cheaper than $200,000) after the famous mortgage crisis of 2008. Thus, the famous image of the “American Dream,” of which a house in the suburbs with a lawn and a barbecue area has always been an integral part, is being shattered

The sunset of the American dream: a massive rise in housing prices is killing the dreams of average US citizens

As the Vzglyad newspaper reports, according to a study by CoreLogic, a California company, real estate prices last year showed the biggest jump since 1979. On average they jumped 18%, but in some places even more: Phoenix by 29.7%, San Diego (California) by 23.7% and in Denver, the capital of Colorado by 19.3%. Low mortgage rates, combined with the desire of most Americans during the pandemic to move to less densely populated areas, have inflated the price of suburban homes. Moreover, experts estimate that in the current environment for the average American family, mortgage payments are becoming a completely unaffordable burden.

“Over the past year, average family income in the US has risen by 2.3 per cent, while monthly mortgage payments have increased by 21.5 per cent and the average sales price of a secondary market home has risen by 24.4 per cent”, – the article says.

In addition, since the events of 2008, banks have sharply reduced the list of those who can realistically be approved for mortgages. Today, lending institutions prefer to deal with those citizens who have minimal risk of losing their jobs, i.e. civil servants with stable salaries such as teachers, firemen, etc., while even well-to-do businessmen have been more frequently rejected.

Another problem has been the physical shortage of housing. More and more construction companies are facing a shortage of workers. Serious cash payments from the government during the pandemic prompted many Americans to give up looking for work and stay home, living on a generally good welfare. The icing on the cake for the housing crisis has been the actions of environmental activists who advocate restricting the allocation of land for individual housing construction, as well as denying access to natural gas for households.

All these factors lead to a situation, under which the own house in the suburbs is no longer a tangible part of the famous “American dream”, but rather a fantasy, which is almost impossible to materialize.

Comments:

comments powered by HyperComments