There is a new American Dream which no longer includes owning your home.

Home ownership is no longer a realist goal for many Americans as many fell victim to the real estate bust. Add less tax deductions available and the advantage of home ownership just isn’t realistic to a growing number of Americans anymore.

In an article written recently in the WSJ, Thomas Surgrue wrote “it’s time to accept that home ownership is not a realistic goal for many people and to curtail the enormous government programs fueling this ambition.”
A man is not a whole and complete man,” wrote Walt Whitman, “unless he owns a house and the ground it stands on.” America’s lesser bards sang of “my old Kentucky Home” and “Home Sweet Home,” leading no less than that great critic Herbert Hoover to declaim that their ballads “were not written about tenements or apartments…they never sing about a pile of rent receipts.” To own a home is to be American. To rent is to be something less.
Every generation has offered its own version of the claim that owner-occupied homes are the nation’s saving grace. During the Cold War, home ownership was moral armor, protecting America from dangerous outside influences. “No man who owns his own house and lot can be a Communist,” proclaimed builder William Levitt. With no more reds hiding under the beds, Bill Clinton launched National Homeownership Day in 1995, offering a new rationale about personal responsibility. “You want to reinforce family values in America, encourage two-parent households, get people to stay home?” he said. George W. Bush similarly pledged his commitment to “an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, ‘welcome to my house, welcome to my piece of property.’”
Thomas wrote ” Surveys show that Americans buy into our gauzy platitudes about the character-building qualities of home ownership—at least those who still own them. A February Pew survey reported that nine out of 10 homeowners viewed their homes as a “comfort” in their lives. But for millions of Americans at risk of foreclosure, the home has become something else altogether: the source of panic and despair. Those emotions were on full display last week, when an estimated 53,000 people packed the Save the Dream fair at Atlanta’s World Congress Center. Its planners, with the support of the Department of Housing and Urban Development, brought together struggling homeowners, housing counselors, and lenders, including industry giants Bank of America and Citigroup, to renegotiate at-risk mortgages. Georgia’s housing market has been devastated by the current economic crisis—338,411 homes in the Peachtree state went into foreclosure in May and June alone.
Atlanta represents the current housing crisis in microcosm. Since the second quarter of 2006, housing values across the United States have fallen by one third. Over a million homes were lost to foreclosure nationwide in 2008, as homeowners struggled to meet payments. The number of foreclosures reached an all-time record last month—when owners of one in every 355 houses in the country received default or auction notices or were seized by creditors. The collapse in confidence in securitized, high-risk mortgages has also devastated some of the nation’s largest banks and lenders. The home financing giant Fannie Mae alone held an estimated $230 billion in toxic assets. Even if there are signs of hope on the horizon (home prices ticked upward by 0.5% in May and new housing starts rose in June), analysts like Yale’s Robert Shiller expect that housing prices will remain level for the next five years. Many economists, like the Wharton School’s Joseph Gyourko, are beginning to make the case that public policies should encourage renting, or at least put it on a level playing field with home ownership. A June 2009 survey commissioned by the National Foundation for Credit Counseling, found a deep-seated pessimism about home ownership, suggesting that even if renting doesn’t yet have cachet, it’s the only choice left for those who have been burned by the housing market. One third of respondents don’t believe that they will ever be able to own a home. And 42% of those who once purchased a home, but don’t own one now, believe that they’ll never own one again.
For most Americans, until the recent past, home ownership was a dream and the pile of rent receipts was the reality. From 1900, when the census first started gathering data on home ownership, through 1940, fewer than half of all Americans owned their own homes. Home ownership rates actually fell in three of the first four decades of the 20th century. But from that point on forward (with the exception of the 1980s, when interest rates were staggeringly high), the percentage of Americans living in owner-occupied homes marched steadily upward. Today more than two-thirds of Americans own their own homes. Among whites, more than 75% are homeowners today.
Yet the story of how the dream became a reality is not one of independence, self-sufficiency, and entrepreneurial pluck. It’s not the story of the inexorable march of the free market. It’s a different kind of American story, of government, financial regulation, and taxation.
We are a nation of homeowners and home-speculators because of Uncle Sam.
It wasn’t until government stepped into the housing market, during that extraordinary moment of the Great Depression, that tenancy began its long downward spiral. Before the Crash, government played a minuscule role in housing Americans, other than building barracks and constructing temporary housing during wartime and, in a little noticed provision in the 1913 federal tax code, allowing for the deduction of home mortgage interest payments.”

read the entire WSJ article HERE

My neighbor recently put his house on the market. “there are just no more tax deductions anymore – I can rent and pay less and still pay less in taxes than owning a home.” he said.

With assessments down and taxes up and expecting to rise more, can Camas Washougal residents continue to afford to live in this community?
If there’s one lesson from the real-estate bust of the last few years, it might be time to downsize the dream, to make it a little more realistic. James Truslow Adams, the historian who coined the phrase “the American dream,” one that he defined as “a better, richer, and happier life for all our citizens of every rank” also offered a prescient commentary in the midst of the Great Depression. “That dream,” he wrote in 1933, “has always meant more than the accumulation of material goods.” Home should be a place to build a household and a life, a respite from the heartless world, not a pot of gold.

So if buying a home is no longer the American Dream, What is?
Some say owning your own business
Some believe it is living a life of work/life balance
Some say its investing
Some say its building family, not the place you live that is the American dream.

What do you think is the new American dream?