Although homeownership still is a dream for most Americans, it's waning as the foreclosure crisis continues to spread.
As the rate of homeownership falls to a 10-year low, the number of U.S. adults who consider owning a home to be the American dream is also on the decline, according to a survey from Trulia.
Just six months earlier, 77% of U.S. adults viewed owning a home as part of the American dream, but by July that number had fallen to 72% as the foreclosure crisis continues to grow.
"Homeownership is certainly not dead," Trulia Chief Executive Pete Flint said in a conference call Wednesday morning, "but there’s a big burst of realism that has entered this market."
Among renters, who are the likely next candidates to enter the realm of homeownership, only 27% of those polled say they plan to ever own a home. And among renters who do plan to someday buy a home, 68% expect it will be least two years until they're able to do so.
4 great reasons to rent
"Large numbers of people delaying their plans to buy a home, or not planning to buy at all, could have an enormous domino delaying effect on economic recovery in the U.S.," Flint said. "Renters converting into buyers are crucial to turning around the housing slump, but the current economic crisis is causing people to become very hesitant to get off the fence and buy a home."
The survey also found that the job market is playing a big role in keeping renters on the fence about buying, with 28% of renters saying getting a new job could help persuade them to buy a home in the next year, and 23% could be persuaded if they got a promotion or raise.
U.S. cities where renters should buy now
They may be in luck. Also during the conference call, Gautam Godhwani, chief executive of Simply Hired, shed some positive light on the future for the job market, noting that the number of jobs available through its job-search engine has grown from 2.3 million in the first half of 2009 to 4.5 million now.
"Clearly we’re on the way to economic recovery, with employers offering more jobs, but we do have a long road ahead," Godhwani said.
How the financial crisis affects mortgages
The survey also found that when these buyers enter the real-estate market, they likely won't be looking at large McMansions that were the result of the average home size growing every year since 1950 until peaking during the housing boom.
The largest number of those surveyed, at 37%, said their ideal home size would be smaller than 2,000 square feet, while only 9% wanted a home 3,200 square feet or bigger.
Just how much smaller is the average home since the peak?
"I predict that this will be the first decade that homes will be built and bought smaller," Flint said.
Is homeownership still part of your American dream? If so, how big would your dream home be?
