You work hard to buy a car, own a home and raise a big family. That’s the American dream… well it used to be.
Times are changing. A new ethos in America is taking form.
One major change taking place is ownership. Homeownership rates in the United States have dropped since 2004.
It’s easier to get a loan when rates are low. So why does a lower percentage of people own homes today? Price is one reason. Home prices are near all time highs. The housing collapse put a quick dent in prices but they’ve recovered…
The chart above shows home prices are close to their all-time highs.
Another reason for the drop in homeownership is the rising unemployment rate. Folks are not sure if they will have their job next year. That’s why they don’t lock into a 30-year mortgage.
Kehm Research readers know technology is the culprit behind the poor jobs market. Robots keep taking your work. It’s a powerful trend that can’t be stopped. As a result, renting over buying is now more common. And not just homes. That’s just a tip of the iceberg (and this iceberg isn’t melting).
The “sharing economy” is helping you to avoid buying big-ticket items. Easy apps allow you to find and borrow at low costs. One example is the ride-hailing app, Uber.
You could buy a $15,000 used car. You’d also pay for registration, insurance, gas, repairs, parking, toll roads, etc. Or… you can pay a few dollars for Uber rides here and there. If you live in a big city or close to work, it’s a no-brainer.
Millennials don’t have the urge to drive like past generations. USA Today reported that high school seniors who had a driver’s license fell from 85% in 1996 to 73% in 2010. A past college roommate from Chicago didn’t even have his license yet. There was no need.
Buying a car to hit the open road is fading from the American dream. Home ownership rates are declining. And many other changes are taking place. Staying on top of them will help you invest and make better decisions.
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