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Scott Rasmussen
Scott Rasmussen
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The Housing Market Is Depressing Americans

Comment

Economists tell us that the recession has been over for a long time, more than 200,000 net new jobs were created last month, and the stock market has doubled over the past two years. In fact, stock market prices are now flirting with highs not seen since before the financial meltdown that occurred in the fall of 2008.

The last time the stock market was this high, 43 percent of Americans rated their own finances as good or excellent. Today, just 30 percent is that upbeat. The reduced optimism is found both among investors and non-investors.

So why aren't Americans feeling better about their own personal finances?

The answer can be found in the housing market.

Just 53 percent of homeowners believe their home is worth more than the mortgage. Thirty-one percent of homeowners think their homes are financially underwater, while the rest just aren't sure. In a nation where we were brought up to believe that building equity in a home was the cornerstone of our personal financial well being, this is a devastating assessment.

Adding to the difficulty, only 19 percent believes the value of the home will go up in the coming year, while 30 percent expects the opposite and thinks the home will decline in value.

Concerns about the housing market extend beyond the immediate future, as well. Most Americans think the housing market will take more than three years to recover. Only 44 percent of homeowners believe that the value of their home will go up over the next five years. In other words, fewer than one in five homeowners thinks their home will go up in value over the next year, and fewer than half expect an increase in value over the next five years.

A generation ago, such a bleak assessment would have been unimaginable.

Put it all together, and just 55 percent believes that buying a home is the best investment a family can make. That's way down from 73 percent just two years ago.

When it comes to people's assessment of their personal finances, the housing numbers collapse has outweighed the stock market gains and improving labor market. That's partly because a home is far and away the biggest single investment for many Americans.

But there is something else at work, as well. For millions who bought a home and paid their mortgage in the belief that they were doing the right thing for their family finances, the collapse of the housing markets seems somehow unfair. It's as if somebody changed the rules of the financial game and told everybody but the homeowners. At a time when large financial firms have been bailed out after creating a financial meltdown, it seems wrong that homeowners are stuck with the bill.

This sense of unfairness, as much as the actual dollar implications from the housing market problems, has caused many Americans to have deep concerns about the nation's future. Just 21 percent now believes that today's children will be better off than their parents. Only 34 percent believes that the nation's best days are still in the future. Those are the underlying concerns that must be addresses before people can begin to feel better about their finances.

To find out more about Scott Rasmussen, and read features by other Creators Syndicate writers and cartoonists, visit www.creators.com.

COPYRIGHT 2011 SCOTT RASMUSSEN

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