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14 | M R EP O RT COVER FEATURE "I t's deep in the race for a man to want his own roof and walls and fireplace, and we're helping him get those things in our shabby little office." —"Pa" Bailey to George Bailey, It's a Wonderful Life Owning a home has been considered the American Dream since before the classic film quoted above debuted in 1946, and for generations since. However, the continued escalation of home prices, limited inventory, and more than $1.5 trillion in stu- dent debt among young consum- ers means the American Dream, though still achievable, may not come as easily as it did for some in previous generations. There are some large hurdles for someone to overcome to own a home, but that is nothing new, said Paul Buege, President and COO, Inlanta Mortgage. "If you go back to the '80s, and the early '90s, many people truly had the hopes of having homeownership, but they saw barriers that existed then that don't exist today." Those barriers included interest rates of 14% or more in the early to mid-1980s and much lower income than people have today. So, there was a perception that homeownership was not achiev- able even back then, Buege said. "There is an absolute path that exists. There are just different headwinds today," Buege said. "What we are seeing with our clients is that if your definition of American Dream is homeowner- ship, it's possible." The State of Modern Homeownership H omeownership peaked at about 69% before the Great Recession, according to Embrace Home Loans. The current rate is closer to 65%. "The dream is very much alive, but it's changing [with regards to] what things have to happen in order for somebody to become a first-time homebuyer," said Allen Jingst, SVP of Sales, LenderClose. He added that the homeowner- ship rate among Baby Boomers is in the 70-75% range, while for mil- lennials, that rate is closer to 50%. Some have had to consider if the American Dream of previous generations is still desirable today, or if that dream has shifted, said Camillo Melchiorre, President, IndiSoft LLC. "I think [the traditional American Dream] is still achiev- able; it's just a little further out. You have to reach for it. It's going to take longer for first-time home- buyers, particularly those with low and moderate income. That's where the industry has to step up to have programs to support affordable mortgages." However, just as with previous generations, the prospective home- owner of today needs to plan and work with a good loan officer to make the dream a reality, Buege said. "It can't be done casually; you have to have a plan," Buege said. "It has to be a disciplined plan. And you should be bringing along an experienced loan officer to help you develop that plan. If you step back from the noise, if you have that discipline, you truly can buy a home. It's different head- winds today, though. And you know, I go back to when I bought my first home in the late '80s, I didn't think it was ever going to be possible to buy a home, with the double-digit interest rates. We saved like mad; worked hard to make sure we had no credit card debt, drove cars that were six to seven years old, and we were able to buy into the American Dream." "I think the American Dream is alive," concurred Tom Trott, Branch Manager, Embrace Home Loans. "It's just more of a chal- lenge now." Though there are low down payment programs, sellers are often looking for buyers who can bring mostly cash to the table so that there are no concerns about USDA, FHA, or VA inspections, Trotter added. Other buyers are not only bringing all cash offers but also making offers with escalation clauses promising to match any higher offer, said Jon Tobias, SVP and Area Manager, Fairway Independent Mortgage. Unlike a rental, an owned home can also become the center of a person's financial where- withal, some experts pointed out. With an owned property, a con- sumer starts building equity that can be used as a source of credit (once enough equity is built up), rather than relying on higher-rate credit cards or personal loans. "Most Americans still have the vast majority of their net worth wrapped up in equity, and a home seems to be the best area of Keeping the American Dream Alive With the housing market booming but suffering from widespread inventory shortages, MReport examines how the industry can help guide more borrowers around the obstacles and toward their goal of homeownership. By Phil Britt