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Magazine

Housing

A Solid Foundation

Why Americans still long for their own homes.

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(David McNew/Getty Images)

Donna Korzun, a 55-year-old former occupational therapist in Dowagiac, Mich., has every reason to be disappointed with her roller-coaster ride through the real-estate market.

Korzun and her husband, a community-college music teacher, bought their modest Italianate house, built in the 1890s, for about $65,000 in 1996. Over the next decade or so, the two-story’s value doubled. But, today, with the economy in southwestern Michigan hurting (“We’ve lost every major employer”) and real-estate values declining almost everywhere since 2005, those gains all have melted away.

 

Now, she says, “my house is worth what I paid for it 15 years ago. I lost everything. I’m not upside-down, but I’m nowhere.” In fact, Korzun says that when you consider all the improvements that she and her husband made—such as the Civil War-era shutters that the family spent years painstakingly hand-painting with an artist’s brush—she would lose around $35,000 if she sold today.

And yet, Korzun says she’s still glad she and her husband bought the house. They raised three children and one grandchild there, and the home is rich in memories, if not equity. “We all shared that one bathroom for showers—and, you know what, we all lived,” she says. Ownership is deep in her family’s veins. Her mother is just now selling a farm that the family has worked since 1877 (and only because her health is declining), and Korzun’s in-laws have been in their home since 1950. “My dad would work in the factory all day and then I remember him plowing at night with the light on the tractor,” she says. “So I knew that’s the way you do it: Just don’t get grandiose ideas.”

Korzun’s experience highlights a central theme in the latest Allstate/National Journal Heartland Monitor poll, which explored Americans’ attitudes about homeownership. Even after a historic real-estate market upheaval that has sent foreclosure rates skyrocketing and housing values plummeting, home­ownership retains a powerful, almost tidal, grip on the American imagination.

 

New-home starts may be depressed to historically low levels, but most Americans still aspire to a place of their own. Roughly four-fifths of those who responded to the poll say they consider owning a home a better financial decision than renting; nearly nine in 10 homeowners say, like Korzun, they would buy their home again; and seven in 10 Americans say they would advise a friend or family member to buy a home as a good way to build long-term assets, even though many economists might differ.

Those results underscore the extent to which most Americans still believe that owning a home is the correct personal decision for themselves and their family. But the poll shows that the public is much more ambivalent about whether the nation’s focus on expanding homeownership remains a good thing for the country overall.

Infographic

Americans have traditionally seen home­ownership as a way to stabilize communities, but most respondents said they believed that the efforts to expand the dream have been destabilizing—by increasing foreclosures and burdening families with debt. And respondents divided exactly in half over whether the government should continue to promote homeownership with  policies ranging from the mortgage-interest tax deduction to Fannie Mae and Freddie Mac’s effective subsidies, or whether it should spend less money on those initiatives. Even about two in five homeowners say that Washington should revoke or retrench the mortgage deduction.

 

Korzun, despite all her affection for her own home, is one of many who wonder if Washington should ease off the push to encourage home­ownership that has characterized federal policy since the Depression. “Incentives for homeownership give people the false idea that government thinks I should buy a house,” she worries. And for those who are not “savvy starting out”—meaning most people, she believes—that assumption can lead them into dangerous waters. After the housing market’s wild recent ride, Korzun may be putting it mildly.

 

PRIVATE OPPORTUNITIES

The latest Allstate/National Journal Heartland Monitor poll is the eighth in a series exploring the ways that Americans are navigating the changing economy. The poll, conducted by Ed Reilly and Brent McGoldrick of FD, a communications-strategy consulting firm, surveyed 800 adults by landline and 200 more by cellphone from March 4 through March 8. It has a margin of error of plus or minus 3.1 percentage points.

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Americans, the survey found, are relatively muted in their short-term economic expectations: Just 35 percent expect their finances to improve over the next year; 39 percent believe they will remain the same; and 23 percent believe they will deteriorate. That’s just a slight improvement over December’s Heartland survey, when 30 percent of respondents forecast improved conditions. Minorities are much more optimistic than whites. Among minorities, optimists outnumber pessimists by more than 4-to-1; whites divide equally between pessimism and optimism.

Scott Bland contributed contributed to this article.

This article appears in the March 19, 2011 edition of National Journal Magazine.

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