If you pay even the slightest attention to the current United States’ real estate market, you will recognize that owning or affording a home poses a significant challenge. Mortgage rates have soared, reaching their highest levels in nearly three decades. Investors also express fear as it appears everyone in the country is beginning to reconsider permanent homeownership over lifelong renting options more seriously.

Each passing day reveals an apparent slippage of the American dream from, yes, you guessed it, Americans. The recent downturn in our economy over the past year and beyond is mostly responsible for this, but there is also another intriguing factor at play.

It’s evident that a significant number of Americans do not currently possess the appropriate financial standing to purchase or own homes. Terrible financial habits and the ripple effect of the economic downturn could be contributing factors, as many aspiring homeowners find themselves unable to afford their desired properties.

Should you identify as such an individual, then this is precisely where you belong. This video will delve into the dynamics of homeownership, explore why a sizable number of Americans currently struggle to own homes, and show you how engaging with a personal financial coach can potentially resolve this issue for you.

Why Home Ownership Is So Hard

So, before we even get to the solution, let’s really take some time to make sure we understand the problem at hand here – Americans just can’t afford homes.

According to a study from Craftjack back in January 2023, about 61% of Americans at the time couldn’t afford homes. Now, considering the fact that mortgage rates have only risen drastically since then, we’re pretty much safe to assume that even more Americans have issues affording homes at the current time.

So, if you’re such a person, don’t fret – it’s not that you’re bad; the case is just that people really can’t afford to buy homes at the moment.

There are several reasons for this issue, and it’s really important to understand them.

Soaring Mortgage Rates

Without a doubt, the major reason why homes have become so unaffordable is the fact that mortgage rates have soared in the past two years.

So, when the coronavirus pandemic hit, the U.S government went on a massive spending spree, giving money to citizens in the form of relief as many people had to stay at home and not work. The goal was for people to at least have the money they needed to sustain themselves while the stay-at-home orders and more took effect.

This relief program was great. But it also had an added effect – people had so much money available, and the demand for goods and services started to go up. Soon, the U.S economy began to deal with inflation.

In 2022 and 2023, the Federal Reserve made it its major mission to tackle this inflationary trend. And the agency did that by increasing interest rates, making it difficult for people and businesses to borrow money. This rise in interest rates affected mortgage rates as well, causing them to go up in accordance. And by October 2023, mortgage rates hit their highest point since September 2000.

The good news is that these rates have come down. But the bad news is that they’re still very close to historic levels. And with this, many people just can’t afford to pay the downpayment as well as the monthly interest remittances that come with owning a home.

The Economy’s Impact on People

Still about the economy, I think it’s also important that we consider how much it has affected millions of Americans in the past two years.

You know the drill – when the economy struggles, it affects everyone. Regardless of whether you’re rich or not, you will feel the impact of a struggling economy one way or the other. Well, over the past two years, these impacts have been incredibly harsh.

Think about it – pretty much everything has seen an increase in price. Necessities have become more expensive, food is now harder to get, and you still need to pay for a lot of other stuff. From medical bills to even luxuries like eating out and going shopping, the prices of everything have gone up drastically.

Sure, owning a home is a necessity and not a luxury. But, considering the fact that every other necessity – as well as several luxuries as well – is getting more expensive, you can understand why people won’t be able to own homes at the moment.

Qualification Has Become More Difficult

Finally, let’s talk about the main reason why we’re here – qualifying for a home isn’t just the same anymore.

Due to the rise in mortgage rates, Americans already must pay even more money to get homes. But, even if you have the money, you might find that the process of even qualifying for a loan is much more difficult.

This is true for several reasons. First, mortgage lenders and financial institutions have increased the requirements for qualifying for these loans. Many of these companies have to be much more careful when vetting applicants, and this means that they have more stringent requirements.

From credit scores to bank account statements and even things like references and such, you need to clear a really high bar for a bank or a mortgage lender to consider you for a home loan. And even if you do that, you still might not get in!

So, it’s really challenging when you think about it. And you can’t blame these companies, too. Currently, the housing market is experiencing significant fluctuation. In light of this, a bank or mortgage lender would hesitate to extend loans and potentially expose themselves to borrowers who may struggle with regular payments. Consequently, they must meticulously scrutinize each loan application, with their objective being verification that those seeking credit are indeed worthy of it.

And if you’re going at this whole process by yourself, you might not necessarily be able to succeed. Which brings us to the solution.

How A Personal Financial Coach Can Help

So, what strategies can truly enhance your qualifications for homeownership? Well, the answer is clear; you need expert guidance throughout this journey. And a personal financial coach offers precisely that – unparalleled advice and support.

A personal financial coach serves as your primary resource for mastering money management. They offer the necessary guidance to improve proper financial decision-making, thus enabling you to streamline and enhance responsibility over your finances.

Engaging a personal financial coach offers an exceptional advantage: they not only understand your objectives, but also equip you with the necessary tools to attain them. So, if accumulating savings or enhancing home acquisition prospects are among your aspirations, all you have to do is enlist the services of a personal finance expert. Just like that, they’ll construct action plans tailored towards realizing and exceeding these targets. It’s that straightforward!

A personal financial coach will not only guide your understanding of the qualifications necessary for home ownership, but also assist in strategizing to meet these requirements. Furthermore, over an extended period, they ensure you stay on track and don’t deviate from the plan.

The beauty here really lies within their approach. It’s grounded in current circumstances, working with what assets are available to you at present to create realistic expectations. Thus, you can progress comfortably according to his own timeline, fulfilling all prerequisites needed to qualify for a home loan.

Truth be told, the process of owning a home isn’t an easy one. And while the economy has now started to get better, requirements for home ownership remain pretty steep. With a personal financial coach, you have a higher chance of meeting these requirements and really moving up the steps to becoming a homeowner.

Sources:

Craftjack report: https://www.wnct.com/news/national/report-61-of-americans-cant-afford-to-buy-a-house/

Mortgage rates: https://www.reuters.com/markets/us/us-mortgage-rates-soar-highest-more-than-23-years-2023-10-25/