Homeownership has often been called the epitome of the American Dream. When I bought my first house at the ripe old age of 23 I remember going to it after the closing and quietly walking around the yard telling myself, “This is my land, it’s my land.” In the previous decade there were a lot of people, specifically people in the transaction of real estate business, tying homeownership to a prevailing cultural dream. I can’t say that I’ve heard the connection between the American Dream and real estate since 2008.

The cultural view toward real estate has changed dramatically. 25% of homeowners own more money than their house is worth; for many of them, their dream has turned into a nightmare. The slide in real estate prices continues, though at a slower pace.

To me, part of the unfortunate fallout is not just how it’s affected households, but also how it’s affected the culture. The undergirding cultural advantage that America has is that collectively we are hell-bent on improvement. This includes improvement financially, life independence and freedoms in general. It is very much who we are; that we are a culture that puts that flag in the sand of its own destiny.

In the military, the essence of what boot camp and training is meant to do is to help people over-power their own instincts. If the bullets are flying, a perfectly natural instinct is to duck and hide, not to advance and rush forward. If one looks at recent American history, some of our greatest strides were in times where people felt that either there weren’t bullets flying overhead or that advancing was the right, but counterintuitive, thing to do. Risk-taking and entrepreneurship is more common in settled and stable times. This is not one of those times.

The longer this drags on, the more it’s going to negatively affect the culture’s appetite for risk-taking. Not only this, but the children of today are being raised in a time where the culture is telling them that there’s lots to be afraid of when it comes to money and that they should be cautious and careful. In this same sense, the children of the Great Depression were raised with a general fear of the stock market and a general anticipation that soon it may crash.

When it comes to real estate, I worry that homeownership rates are going to be less (or at least delayed) when this generation’s children come into adulthood. For me, when I was 23, I truthfully don’t know that I was remotely worried that the value of the house could go down. This was in a very different era of time. Tomorrow’s adults will absolutely know this and probably be hesitant to buy even though it’s often financially better to buy a home sooner than later in life.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. No strategy can assure success or protect against loss.

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