It may not be a huge surprise that the American Dream of homeownership took a huge hit in the years since the housing market meltdown and financial crisis of 2007-2008.
Despite rising home prices in a recovering market , those years of the Great Recession and the foreclosure crisis still reverberate. And they have taken their toll.
But actual numbers pegged to this fading American Dream have been hard to find.
A new survey conducted on behalf of the National Endowment for Financial Education (NEFE ) by Harris Poll finds that 50 percent of American adults say their top financial goal is having enough money for retirement.
In fact, the percentage of people who cite having enough money for retirement as their top financial goal is on the rise since the recession.
In 2011, when NEFE asked American adults the same question, 47 percent said having enough money for retirement was their top financial goal.
“The American Dream has long been associated with the gratification and security of a comfortable home within the picturesque borders of a white-picket fence,” NEFE writes in their presentation of the survey’s results. “However, today the perceived importance of homeownership appears to be waning.
In 2011, 17 percent said homeownership was their most-important financial goal, compared to just 13 percent in the latest findings.
“People are more in tune with the importance of saving for their retirement years,” says Ted Beck, president and CEO of NEFE. “Economic recovery is inching forward yet many individuals and families still are experiencing difficulty getting back on track. Americans seem to be finding reassurance in more long-term financial-security-based values rather than material values.”
The 2014 online survey of 2,025 U.S. adults ages 18 and older asked respondents to consider their financial goals and the challenges of meeting those objectives.
In thinking about their own financial situations, three in five (60 percent) feel they are achieving the “American Dream” (of saving for retirement), compared to 57 percent in 2011.
Biggest Barrier: Inability to Save Money
But there are barriers that limit people from reaching their goals, with 63 percent citing the inability to save enough as an obstacle (compared to 70 percent in 2011) and 47 percent stating that managing debt is a hindrance (compared to 54 percent in 2011).
In addition to not having enough cash for a down payment, tighter credit standards are keeping many first-time buyers out of homeownership.
According to the National Association of Realtors, the average accepted credit score on conventional mortgages was about 720.
“A credit score that would have gotten you a mortgage before 2008 is now below the average rejection score,” Walt Molony of the National Association of Realtors told MarketWatch.
“Things are improving, but at a snail’s pace,” he said.
The NAR points to its “Housing Affordability Index,” which shows that if a U.S. family was earning the median family income in 2013 of $63,623, it would have 175% of the necessary income to buy a median single family home priced at $197,400.
That amounts to about 20 million households able to purchase a home, but opting not to do so.
And Molony faults the banks more than anything. “The problem is overly restrictive mortgage lending standards, relying on arbitrarily high credit scores,” he said.