We are already in 2021, but the idea of achieving the so-called "American Dream" has always been alive from generation to generation. Homeownership remains the top main factor in achieving the "American Dream," and even the millennials dubbed as "the rent generation" are aiming for this goal.
What is the American dream?
According to Investopedia, the term "American Dream" was first used in the 1931 best-selling book called "Epic of America." The author, James Truslow Adams, defined it as "that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."
The belief promotes the idea that anyone can write their version of success regardless of class and race. To achieve this, one must go through sacrifices, risk-taking, and hard work.
The concept of the "American Dream" often falls on achieving a high-quality education and homeownership.
MIAMI, FL - JUNE 01: Michelle Ruiz (L) and Nilson Ruiz listen as Wells Fargo home mortgage consultant, Michael Carreras, helps the potential homeowners with their an application for a down payment assistant grant at the Miami Airport Convention Center on June 1, 2012 in Miami, Florida. The initiative by Wells Fargo, named the ‘NeighborhoodLIFT’ program gives qualified prospective homebuyers with down payment assistance grants up to $15,000; part of $9 million commitment in down payment assistance and homebuyer support programs in 2012 and a five year $30 million home mortgage purchase lending pledge.
Millennial homeownership
Based on a recent survey by realtor.com, most of the 800 millennial respondents and prospective homebuyers look into purchasing their first home this 2021.
Realtor.com senior economist George Ratiu said that millennials have a strong drive to become homeowners this year but face extra challenges brought by the coronavirus global pandemic.
"Americans, even millennials who many thought would never buy, have a strong preference for homeownership for the same reasons many generations before them have -- to invest in a place of their own and in their communities and to build a solid financial foundation for themselves and their families," Ratiu said.
"However, today's first-time homebuyers face unprecedented challenges brought on by a lack of available homes for sale and double-digit price growth. They are resilient, though, with many in the market searching for their home for more than a year," he added.
The pandemic made it harder for millennials to achieve the American dream of homeownership. The survey shows 43% of the respondents have been looking for a potential home for more than a year already. Meanwhile, 33% have been scouting the market for six to 12 months now.
Why do millennials want to invest in their own home?
Achieving the "American Dream" remains the top reason why first-time millennial homebuyers are out in the market looking for their first property. When asked why they are eager to become homeowners, the respondents top four responses centered on the financial benefits of owning a home, such as:
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"I want to be a homeowner."
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"I want to live in a space that I can invest in improving."
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I need more space."
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"I want to build equity."
But when asked why they have not purchased a home, 44% of the respondents said they don't have enough money for a down payment, while 34% said they hadn't found a home that would fit their budget.
These two factors: affordability and lack of home inventory is the major challenge faced by potential homeowners these days. But they eager to make it and have initiated the hunt through online real estate listing websites.
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