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Chyanne Walton
Professor Koning
English 113B
7 May 2014
The fall of The American Dream

The housing bubble was an economic crisis that affected the United States housing
market. As result of the housing bubble crisis many people lost their homes. Before the housing
bubble surfaced, people were purchasing homes to live the American dream. However, this
dream came with nightmarish consequences; people were required to take out loans in order to
purchase these expensive homes and were subject to abuse by greedy lending companies who
issued loans to risky buyers such as low-income families, minorities, and young adults. Although
many people were trying to achieve the American dream, the housing bubble only affected the
low and middle class. People from all different kinds of backgrounds were affected not just a
specific race.
Risky lenders would issue out loans to families they knew were incompetent of paying.
These families were trying to pursue The American Dream and they knew taking out a loan
would eventually help them. But risky lenders targeted specific buyers and families they knew
would potentially foreclose or go bankrupt due to their pursuit. The reason they knew is because
of their annual incomes, majority of the families barely made enough to pay for their homes.
According to Lufkin Daily News, Now that homeowners are having to pay on the principal,
combined with rising taxes and utilities, many of these marginal mortgagees can't make their
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house payments. Once families couldnt pay majority of them was forced into taking out loans
and second mortgages to pay for their regular monthly expenses. Additionally, the housing
market in many parts of the country has cooled considerably, and thousands of homeowners now
are in houses not worth what they paid and unable to make their payments. (Lufkin Daily
news).
Within this time there were a lot of people purchasing homes and taking out these risky
loans to achieve their American dreams. The idea of the American dream is to achieve some sort
of happiness within your consumer ways. The happiness comes from your home or
accomplishments, which everyone intends to achieve over a lifetime. Young adults and families
were trying to achieve this American dream but had no idea what they were in store for. All
these families wanted was to purchase a home but instead they got expensive loan rates and a
high mortgage they couldnt afford once the housing bubble started to take place.
As the economy began to worsen it took a toll on the housing economy as well. William
Grigg of The New American, The housing bubble, in turn, has inflated a huge consumer credit
bubble as consumers exploiting decreases in Fed-controlled interests rates, have repeatedly
refinanced their mortgages to consolidate debt. People had to refinance their mortgages just to
make their first mortgages. The economy came down and took the housing market with it; thats
what caused the housing bubble to burst. It caused interest rates to become lower, the demand for
housing to rise and therefore prices increase. A lot of people were not able to afford their homes
once these prices increased.
An important factor to the housing bubble is race and social class. Social class is based
on a persons income and social status. If youre receiving a high salary and live in a
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neighborhood with surrounding people like yourself you would be considered high class and so
on. It is important because the high class didnt want fortunate or less fortunate families/races
coming into their neighborhoods. Bell Hooks asserts that, It never ceases to amaze me that New
York City is one of the most ethnically diverse cities in the world, yet racial and ethnic
segregation continues to inform housing practices both in terms of the neighborhoods individuals
choose to live in, who landlords rent property to, and who is able to buy (Hooks 132). Housing
is racially segregated because of certain races prefer segregated housing. According to Hooks,
research Studies indicate that while an overwhelming majority of black people would prefer to
live in mixed neighborhoods, most white people prefer segregated neighborhoods or accept
racial integration if it means one black person or family lives in their area (Hooks 142). I
discussed social class because the housing bubble did not affect people in middle/high or high
class as much as the poor. But it is significant to mention social class because the low class was
trying to achieve this idea of the American Dream that the middle and high-class people were
living. Although some middle class were affected by the housing bubble once it burst it didnt
affect them as much because they had already been accustomed to their middle class lifestyles.
After the housing bubble burst people were left in bankruptcy with no homes or jobs.
People suffered a lot from the burst because not only did they lose their jobs they lost their
homes and for a lot of people this torn their families. People were left with bad credit and debt.
Because the housing bubble was predicted by Bell hooks for some it came as no surprise but for
those who were not aware it struck them as a nightmare.
As a result of the housing bubble burst many people were affected by it and all of these
people were different minorities and social classes. All kinds of people had lost their homes due
to their loans and mortgages that they couldnt pay. The only people who were not affected by
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the housing bubble were the rich and high class. But for the people who did they were forced to
move into smaller homes with their families and left with debt. After the burst some families
were even left homeless because all of their savings went into these homes all because they were
trying to live the American dream. Minorities and people in middle and low class look up to the
rich because they want to live their lives. Without being financial stable its quite impossible to
achieve the American dream because youll be forced into loans and trying to pay for things you
just simply cant afford. As a result of their dreams and aspirations of achieving the American
dream many families were forced into giving their homes up due to foreclosure and had to move
into smaller places in neighborhoods that they did not desire.














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Works Cited
"EDITORIAL: Housing Turmoil: Fallout is Going to Be Painful, but the Market Can Handle It."
Lufkin Daily News, (2007): Web. 6 April 2014.
Grigg, William Norman. "Will the Housing Bubble Burst?." The New American, 20.10 (2004):
20.Web 2 April 2014.
Hooks, Bell. Where We Stand : Class Matters. New York: Routledge, 2000.
"Housing woes take bigger toll on economy than expected: Paulson". AFP.07-10-17.Web 6 April
2014.