The American Nightmare: Some Families Still Struggle, 10 Years After the Housing Crisis


First, using a national directory of Lutheran churches, Steve emailed pastors and told them about his music ministry and his family’s story. A handful agreed to let him come play, and Steve went out alone on a short tour to churches in Nevada and California.

When he came back, he was sure he could support his family with his music.

While they still had the house, Christy and the kids packed up for a test tour.

First, they went out for about a week and came back. Then two weeks. The shorter trips taught them what they needed to take and what they could live without, like the big-screen TV or dozens of pairs of shoes.

Finally, in early 2012, they set out for an eight-month trip through Colorado, Nebraska, Arizona and Wisconsin.

Steve quickly realized that offering free concerts made it easier for pastors on tight budgets to book him, and that his audiences were happy to buy his CDs and give donations.

“We came back in November of that year, knowing that we had one last Christmas there, and then we had to pack up and get out,” Steve said. They stacked the remaining contents of their house in a storage unit, where they now joke their belongings are probably turning into dust.

Since then, they have visited all 48 contiguous states, and their children have been everywhere from the Olympic National Park in Washington and the Grand Canyon to the heart of New York City.

“We still get the eye rolls sometimes,” Christy said, from people who think their way of life is unrealistic or impractical. But even the family and friends who had their doubts in the beginning have mostly come around.

University of Florida economics professor Mark Flannery said the ideal of the American dream is so ingrained in our society that it’s only natural to doubt those who deviate from it.

“Some people think that buying a house is the best investment you can make and that everybody should own one,” he said. “I think that’s too strong a generalization.”

It’s a deeply personal decision, one based on your values and lifestyle goals, he explained. “I wouldn’t uniformly suggest that everyone should own one.”

Still, many people who lost their homes during the financial crisis never forgot the traditional American dream. Instead, they spent years working to get it back.

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Kay Averett used to think there was no such thing as a problem she couldn’t solve by earning more money.

The Georgia attorney had been working since she was 14.

So when her mother had a stroke in 2008 and needed the constant care of an assisted living home, Averett covered her mother’s mortgage and the cost of the elder care home, along with her own expenses: a mortgage plus the normal upkeep of their five-bedroom home in Marietta, Georgia; ongoing medical care for her youngest daughter; a horse and stable fee.

“Whatever the issue was, give it some money and calm it down,” Averett said.

At the same time, the company she worked for moved operations to Canada. Her manager tried several times to get her to relocate until finally, her job was the only one left in the U.S.

In 2009, when the country was deep in the recession, Averett was laid off.

“I went to start looking for jobs, and there were no jobs,” Averett said. “Week after week after week, there was nothing. Because I’ve always worked so hard… I always thought when you need money, you just work. That’s what you do. It was a huge shock to find out you can’t just do that.”

Around the same time, Averett’s husband, John, quit his job only to also discover it was nearly impossible to find work elsewhere. First, the Averetts lived off her unemployment check, but the $300 she got each week wasn’t even enough to cover their $1,500 mortgage. Her unemployment benefits ran out before she or John could find new work.

Finally, the couple realized that bankruptcy and foreclosure were their only options. They left the house on New Year’s Day in 2012.

“I just didn’t have any feelings,” Averett said. “I couldn’t have any feelings. It was just a house. It was just walls. It was really a relief, because I knew whatever nightmare it was, this was one of the steps to getting out of the nightmare.”

For a while they lived in a tiny home on a friend’s horse farm. Then they moved into Averett’s mother’s house and had to scrape together money to pay the $500 a month mortgage while eating whatever was available for free from the food bank at a local church.

“We just had no money left,” Averett said. “I couldn’t see that I would ever have work again. I felt like I had a bag over my head and I was looking at everything through burlap. I couldn’t see any kind of future at all.”

Averett took whatever contracts she could get. She worked sporadically.

She would start to see the future again. “Then all it would take is maybe a week that I didn’t bill so many hours, and I was immediately back into that… fight or flight mode. ‘How are we gonna survive? How are we gonna survive? I didn’t work this week.’ So, it seemed like it dragged on forever,” she said.

Finally in 2013, a client started to give her enough work to provide her with a full-time salary. Still for years after that, her emotions remained tied to her income.

“I felt like I had a bag over my head and I was looking at everything through burlap. I couldn’t see any kind of future at all.” - Kay Averett

But in 2017, the Averetts hit a milestone: They became homeowners. Of all the families that shared their foreclosure stories with The Penny Hoarder, the Averetts are the only couple who managed to buy another home.

After searching for most of 2017, the Averetts decided to leave Marietta and found a small home in northern Georgia. They closed on the house and started to move in on Jan. 8, 2018.

This home is more modest than the “McMansion” Averett described losing — 2,000 square feet instead of 4,000. A well-maintained older home instead of a new build. Three bedrooms instead of five. A carport instead of a garage.

“I found that we just filled it up with a bunch of junk,” Averett said of the massive home that was lost to foreclosure. “I remember thinking ‘This is more house than I ever want to take care of. Someday, I’m going to live in a small home.’ … Well as luck would have it, I’m going to get to live in a small home.”

But their move wasn’t all about what they were giving up. Less house meant more land. Rather than a half-acre lot, Averett now has 4 acres of land and plenty of room for the garden of her dreams.

When they finally started looking for this house, Averett only had one rule: Even if it was the best deal they could find, they would not buy a foreclosed property.

“There’s something about that that just makes me uncomfortable,” Averett said hours before she headed out to sign the paperwork for her new home.

“You’ll be living in someone else’s misery.”

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Homeownership is still a pillar of American life, a way to build wealth and pass it down through families.

“It’s not just personal security, but there’s also a public policy interest in encouraging homeownership,” Flannery said.

Ownership stabilizes neighborhoods, builds community networks and gives people better places to work and live, he explained.

But continuing changes to financial regulation and the lingering specter of the crisis have some Americans doubting that homeownership is a sure bet.

“The shine of homeownership has been diminished somewhat by the collapse of the housing market,” Snaith said. “It’s a narrative that has been altered by the housing bubble, but the question is by how much and for how long.”

Samuel says the core idea of the American dream is actually alive and well. “Younger people are seizing this concept of choosing your own path,” he said, instead of defaulting to wanting a car and a house and the trappings of middle-class life. “Taking on a consumption-based model doesn’t work for them.”

The latest iteration of the American dream might not be about owning a house at all. It might just be about financial stability.

“To some extent, if you’ve got the financial security to buy a house and take on those financial commitments, that means in some sense that you have made it,” the University of Florida’s Mark Flannery said. “It’s not the house that means you’ve made it. It’s your ability to finance the house that means you’ve made it and you’ve attained part of the American dream.”

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“Some people think that buying a house is the best investment you can make and that everybody should own one,” said Mark Flannery, an economics professor at the University of Florida. “I think that’s too strong a generalization.” Photo by Tina Russell / THE PENNY HOARDER

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Averett was afraid to make the financial commitment to buy another house, “and probably will be for the rest of my life,” she admitted. “But I’ve done so much homework on knowing every penny that we will have coming in for the rest of our lives.”

Averett’s math included how much she and her husband expect to bring in until they retire and estimates of what they’ll receive from their pensions and Social Security. She’s nervous, but her confidence is growing.

“We’ll always be able to pay for this house.”

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Every so often, after a particularly good performance at a church, a pastor will offer Steve Bagasao a job to lead the music ministry at their church. Sometimes, Steve and Christy even do the math and think about it. So far, the answer has always been no. They still home-school their children and still hope to one day retire to the Midwest. They love their lives right now too much to be tied down.

Now, it takes less than 10 minutes for the Bagasaos to pack up the trailer. They’ve had a lot of practice.


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A decade after the foreclosure crisis. The Penny Hoarder examines the crash's impact in a four-part special. Click here to read "The American Nightmare."

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