I often wonder who created the foundations of the American Dream. The dream that is often associated with having a successful career, getting married and having children, and buying a home with a white picket fence to grow old in. This mindset has been engrained from generation after generation as the status quo.
Across the US, the overall median rental price is at a staggering $1,930 per month/$23,160 per year. For someone who works for $20 per hour, 40 hours a week, the expected take home pay after taxes is around $36,000. Subtract the rent from that total and you’ll find that $12,500 goes fast when inflation has you spending $240 a year buying milk and eggs at $5 a carton.
As a Realtor® it’s my job to know the market, and while it’s important for me to understand median home values and interest rates. I spend a great deal of time analyzing the economy and how it may affect people in varying demographics. This scenario is not uncommon for many Maine residents, with non-family households making a median average of $34,126.
According to a study taken from the Pew Research Center , 49% of hopeful homebuyers have felt as though homeownership is not in their realm of possibilities. This sentiment has had a stronghold on many prospective buyers who feel it is more worth it for them to use 50 to 75 percent of their income to pay rent instead. If you feel you can’t attain the “American Dream,” it is because there are systemic governmental sanctions that were once in place that are still in the process of being eradicated.
Illegal practices such as blockbusting and steering were practices only frowned upon, until the
government passed multiple enactments in the 1970’s to try to diminish unfair treatment. Redlining for example, is a now illegal practice that has roots in our own state. The Maine island, Malaga, was once home to a racially diverse fishing community in the 1800’s before the State of Maine chose to forcibly remove all of its citizens in 1912, and razed their homes to prevent them from returning.
The reasons for the removal related to post civil war hysteria, race, and the potential rise of education. While this is now unethical, it’s important for buyers to understand that this type of conduct was regularly used in the nation’s past. The housing market cycles every 10 to 18 years, meaning that only three cycles have passed from the 1970’s when tighter regulation began. However, in the grand scheme that still leaves individuals who were subject to this practice with less opportunity.
I’ve found that it is worth it for me as a Realtor® to take the time to educate my clients about the history of real estate, the current economy, and the process of how purchasing a home is valuable.
If you feel like the economy is dimming your chances of purchasing a home, I urge you to reach out to an experienced Real Estate professional who will take time to get to know you and your situation and put you in touch with trusted lenders and loan officers. I often tell people that the first step to take is to get pre-approved!
Applications for financing take only a few minutes of your time and most lenders will have it completed within 48 hours. There are tons of great programs that help home buyers in these situations that could put you in a better position to purchase. If you don’t qualify for a mortgage right now, work with your lender to know exactly what areas need more work.
Most of all, make sure the professionals you are working with are thoughtful to your situation, and always treat you fairly. <
Tia Morrell is a Realtor for Landing Real Estate in Windham. Call her at 207-518-8298.
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