The American
dream has many facets, but one of the most enduring is the idea of a home of
one's own, with or without a white picket fence.
Owning a home
was certainly a part of Claudia Azula–Altucher's plan when she came to the
United States from Argentina by way of Venezuela. She had grown up under a
military regime but decided early on that she wanted a different life. She
came, she said, "to follow my dream of being here in the United States;
half-running, half because I wanted to eat pizza."
Pizza
was not even the half of it. Azula–Altucher obtained a college education and
eventually landed a job as an information technology manager for a law firm.
And then, she said, "I wanted to have my own house.
It was part of the American dream, having my house."
Azula–Altucher found a house she loved, but it
was a stretch financially, and it turned out to be a bit of a money pit.
As soon as she bought it, she said, "every
penny I made went into the house so I had no money to eat, just money to go to
work, eat whatever I cooked, and then every weekend I was in my house fixing
things."
Even as she became adept at home repair,
Azula–Altucher was racking up debt, and soon she had no financial wiggle room.
Then, in 2009, she lost her job. With five months' severance and ongoing
mortgage and car payments, Azula–Altucher was in trouble.
Rent or Buy A Home?What Millennials Should Know:
First time homebuyers
like Azula–Altucher are often surprised by the true costs of home ownership,
from necessary repairs to ongoing maintenance. A study by real estate
site Zillow found that, on average, homeowners pay more than $6,000 a year on
unavoidable hidden costs like homeowner's insurance, property taxes and
utilities.
In addition, many people are currently making
smaller down payments when they buy homes, so they have less flexibility to
adjust their finances to accommodate life's ups and downs.
Some 27 percent of
homebuyers purchased homes with down payments of 3 percent or less in the first
quarter of 2015, according tomarket research firm RealtyTrac, the highest share in
nearly two years. And the 14.8 percent average down payment in the first
quarter of 2015 was the lowest since the first quarter of 2012. (Azula–Altucher
said her down payment was less than 10 percent of the $250,000 she paid for her
home.)
Homebuyers' finances
have improved since the financial crisis: In 2013, at nearly all income levels,
fewer of them were devoting more than 30 percent of their income to housing costs, according to the
Joint Center for Housing Studies of Harvard. But even so, more than 20 percent
of homeowners with incomes between $45,000 and $74,999 were in that group, as
were nearly 10 percent of those with incomes of $75,000.
Small wonder, then,
that Census Bureau data indicated that the rate of home ownership in the third
quarter of 2015 was just 63.7 percent, down from 64.4 percent a year earlier,
while renting continues to become more common.
Azula–Altucher got lucky. As her severance was
about to run out, she received an offer for the house. She has since married,
and her husband helped open her eyes to other types of employment
possibilities. She began writing self-help books, and their success enabled her
to pay off her debts.
Azula–Altucher and her husband have no plans to
buy a home, however. "I don't want to buy a house," she said. "I
want to rent because I realize maintenance is a lot of work, there are hidden
fees, taxes can go up and I'd rather spend all that energy writing and using my
talent rather than worrying about a house.
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