DELPHOS — Many factors are suppressing the American Dream. The reality of owning a home has been stifled by high unemployment, stringent lending practices and higher house prices and is pushing buying a home out of the reach of many Americans.

According to the U.S. Census Bureau, the American home ownership rate stands at 64.8 percent in the first quarter of 2014. In 2004, the rate peaked at 69.2 percent and has steadily decreased 4.4 percent. Current rates are similar to those in the second and third quarters of 1995 which were 64.7 and 65 percent.

Drops in Ohio home ownership rates almost mirror the U.S. decrease. In 2012, only 67.9 percent of Ohio residents owned their homes after a steady decrease from 73.3 percent in 2005, which is a decrease of 4.2 percent. The current rate of home ownership is significantly less (1.3 percent) than in 1996, which stood at 69.2 percent.

The low ownership rate suggests the housing market recovery of the last three years was driven by investors who were snapping up properties and converting them into rental units.

June is National Homeownership Month and a time to reflect on what homeownership means to individuals and families. A house is a financial asset, a place to live and raise children, a plan for the future and an investment in the community. It is also a time to reassess personal and/or financial goals when planning for the purchase of a new home.

Agent Krista Schrader of Schrader Reality said the Delphos market is stable and in the last six months, according to the West Central Association of Realtors data, 22 homes have sold in the Delphos area.

“The prices ranged from $11,000 to $282,000, with the majority selling this spring,” she said. “The spring market has showed many buyers out looking, our office is busy with daily showings, open houses and appointments educating buyers on the home process.”

She said there are an additional five homes in this data showing sale pending, awaiting closing. The listings outweigh the purchases, but Delphos is still a stable real estate market and buyers are actively out looking.

“Our buyers range from first time home buyers to people looking to downsize,” she explained. “So, there is a range of the types of buyers.”

Schrader said she feels the Delphos market is stronger than three years ago.

“We aren’t as strong as I would like to see but we are headed up instead of down and that’s a plus,” she exclaimed.

Buying a first house is very emotional and financing the purchase can be an intimidating experience. It takes research and careful shopping to find the home families want and need and deciding how much to spend and which type of mortgage will work best, can be confusing. It’s beneficial to do some footwork and get prepared before stepping into a sales office, model home or open house.

One of the first priorities for first time home buyers is to get familiar with the industry lingo. Acronyms like ARM (Adjustable Rate Mortgage), APR (Annual Percentage Rate), PITI (Principal, interest, taxes, and insurance) and RESPA (Real Estate Settlement Procedures Act) will be common terminology used during the home buying experience.

First Federal’s Retail Lending Manager Vice President Elaine Evans said she likes to educate her customers.

“I tell them no question is dumb unless they don’t ask it,” Evans explained. “Many people listen to their friends rather than talking with a professional.”

She said before beginning house hunting, first-time buyers should get pre-approved so they know what they can afford and what type of program they qualify for. There are several programs available.

“The most popular program is the USDA (United States Department of Agriculture) Home Loan which requires no money down,” she detailed.

USDA Home Loans are guaranteed and provide up to 100-percent financing for a home purchase or refinance. There are many qualifying factors for a USDA home loan, things such as income limits and loan amount may limit eligibility.

“There are also 3.5-percent FHA (Federal Housing Administration) loans and conventional loans which require a minimum of five percent down,” Evans said.

With a FHA loan, most closing costs and fees can be included in the loan.

Evans said there are many variables taken into consideration when qualifying customers for a mortgage loan.

“We look at the overall credit history,” she explained. “Mortgages are not cut and dried.”

When it comes to deciding on a price range customer’s want to pay for a home, it has to be a comfortable figure for the home buyer.

“I can show them on paper what they can afford but, I don’t know how they want to live,” Evans said.

She said customers should be monitoring their credit report and can do that for free through the federal website

“Even if people are not looking for loans, it is a good preventative maintenance measure to check on credit accounts,” she emphasized. “We review their credit and I instruct them what to do to clean up it up.”

The next step is to pay down credit card debt which limits what customers qualify for from a lender.

“Right now, we’re seeing young people with no credit,” Evans explained. “They can get a credit card, use it to fill their vehicle with a tank of gas and pay it off every month. That builds credit.”

She said some credit cards can harm you when trying to get a mortgage. Opening up a brand new loan — for a car or other large purchase — and closing out multiple credit cards can also hurt credit scores.

Maintaining a budget is also very important as well as changing behaviors — making coffee at home rather than buying it at the gas station, walking rather than driving, eliminating impulse buying, etc. — to save money. She said it’s surprising how many people don’t have a budget.

“I tell customers to write down everything they purchase for a month so they know where their money goes,” Evans said. “It’s amazing, the amount of money people don’t know they are spending.”

She said customers return later after becoming more financially fit and they look at applying for a mortgage loan again.

“Even if a customer still has credit card balances and pays $900 in rent, we may be able to get them approved for a $600 house payment,” Evans detailed.