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The “renter’s nation” is increasingly being used by pundits to describe the US housing market.

If you go to the source, middle-class Americans, you’ll get a different story. Despite what you may hear, the myth that we are quickly becoming a “renter’s nation” is just that – a myth.

According to Gallup, the numbers clearly suggest quite the opposite. When polled, only slightly over 1/10th of the population completely spurn the idea of home-ownership altogether.

GallupHousingData

Household income is the primary predicator when it comes to opinions on the importance of owning a home. It seems obvious – most people who can afford to own a home already own one or plan to buy very soon.

Three-quarters of those making at least $75,000 a year own their home and plan on continuing to own, while another 15% say they will buy a home within the next 10 years.

Still, it is apparent that the hope of being able to buy a house is relatively strong even in the minds of those with below-average incomes, given that between 35% and 40% of Americans making less than $50,000 a year say that while they currently don’t own a home, they plan on buying one in the future.

There is plenty of positivity surrounding home-ownership. The American dream is still the American dream – to those who can afford it. Might pundit cynicism on housing be misplaced?

Is the American dream of home-ownership just that – a dream – or is it based in reality? Can we really afford the dream?

In most U.S. markets, the majority of homes for sale are within reach of the middle class and buying is cheaper than renting in all of the 100 largest metros.

However, in many markets, especially along the coasts, homeownership is still out of reach for the middle class. Even having a college degree is no guarantee that homeownership is within reach in the priciest markets.

Trulia_MiddleClassReport_Infographic

And yet, Gallup data on homeownership provide strong support for the idea that the American Dream of owning a home continues to thrive.

These results show that the primary reasons why Americans don’t own are financial rather than cynical. There lies the center of the Housing Market – Home Affordability.

To truly analyze a subjective subject like housing affordability is complex. However, failing to analyze home affordability can have drastic results. Results that we are still trying remedy from the great Housing Crash and Great Recession of 2007.

Making housing more affordable is a difficult task. If you lower home values you do so at the expense of current home-owners. When they sell their home they net less than expected, nothing at all or they actually have to liquidate assets in order to complete the sale. Assets they would have quite possibly used toward the down payment on a new home.

With fewer assets to apply toward their next down payment, sellers turned buyers require higher loan to-values and become a riskier bet for mortgage lenders. Few loans are made and few homes are sold as a result.

What solutions do we have? Catching up with the inventory glut by building new construction (at the right pace) is step one. Incentivizing housing construction would be a good idea. Assuming, of course, we learned our over-indulgence lesson from the past decade.

However, in some markets like most of the California Coast and New York City, adding inventory will only dent housing affordability issues. How can we solve their dilemma? Is it even solvable?

Finding a savvy mortgage consultant who can deliver creative mortgage options is a must in all markets, but especially in the pricier ones like California. The right loan officer can also introduce you to a sharp real estate agent with a keen eye for value and potential.

So let’s have the affordability discussion and figure out YOUR options. Let’s do it now too. With home prices on the rise and higher interest rates looming there is no time like the present.

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