Low mortgage rates are not pushing most renters to consider homeownership
Washington – November 20, 2013 – (RealEstateRama) — The worst housing crisis in generations and the slow rebound back to normalcy has not changed the view of homeownership for two-thirds (67 percent) of Americans according to a new poll on housing from NeighborWorks America, one of the country’s largest community development nonprofits focused on strengthening housing and communities.
Meanwhile, renters have not been swayed to purchase a home despite near-record low mortgage rates and a general decline in home prices. According to the poll, 55 percent are not considering homeownership, while 42 percent of renters are considering it.
But confidence in knowing when it is the best time to buy a home runs high. Nearly 70 percent of Americans said that they were confident (46 percent very confident) in their ability to know when it is the right time to purchase a home, suggesting that there is a broad set of information available to help buyers make a good decision for what is usually the largest financial choice most will make in their lifetime.
In fact, the NeighborWorks America survey found that 88 percent of consumers ranked owning a home as an important part of the American Dream with 61 percent who said it is either the most important part or a very important part.
“The resiliency of homeownership comes out loud and clear in this poll,” said NeighborWorks America CEO Eileen M. Fitzgerald. “Although the housing market took one of the largest hits ever — with home prices falling nationally and foreclosures rising to more than one million homes annually — homeownership remains a goal many want to achieve. But it’s important to also note that the poll also underscores that we need to have quality and affordable rental homes available for those people who simply prefer to rent.”
But while the overall view of homeownership has not been changed by the housing crisis, the poll found dramatic differences between current homeowners and renters. The poll found that 63 percent of renters are more likely to rent their next home because of the housing crisis, while only 25 percent of homeowners would choose renting their next home.
A critical point identified in the survey is that whatever the housing choice, having a quality and affordable home matters to people; homeownership is not linked to a person identifying himself as successful. Specifically, the poll found that 55 percent of consumers said that they would still feel successful if they never owned a home.
The housing crisis and consumer preparedness
But the poll did reveal tension among consumers as they are more polarized when it comes to being prepared to purchase a home. While nearly half of Americans (48 percent) said that they were more prepared today to buy a home than five years ago, forty percent said that they were less prepared.
“These results tell us that most consumers believe that they know when the time is right for them to buy a home, and feel strongly that homeownership is important, but that their personal situation may have been affected in the past five years and is holding them back from pursuing homeownership,” said Fitzgerald.
The poll showed that there are a variety of obstacles to homeownership, and that these obstacles are driven largely by personal economics including lack of job security (14 percent) and lack of a down payment (13 percent). Americans were less likely to believe that weak or bad credit (7 percent) was holding them back from buying a home.
Attitudes around renting
Although mortgage rates are extremely low and home prices well off their peaks from five years ago creating a largely affordable home purchase environment, renters generally are not thinking about buying a home today. According to the poll, 55 percent are not considering homeownership, while 42 percent of renters are considering homeownership.
The poll results provide a window into how renters feel about their communities and their neighbors. According to the poll, 81 percent of renters said that they were as committed to their community and home as much as if they were homeowners. Moreover, the consensus among homeowners and renters is that a community is not hurt when people who rent move in. A majority (51 percent) disagree that neighborhoods are hurt when renters move in, compared with 43 percent who believe that renters hurt neighborhoods.
Note: Widmeyer Communications, A Finn Partners Company conducted a national representative survey among 1,000 U.S. adults using a random digit dial (RDD sample). The survey has a margin of error of +/- 3.1 percentage points at a 95% confidence level.
About NeighborWorks America
For 35 years, NeighborWorks America has created opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $19.5 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.
Contact: Doug Robinson, , 202-870-3583, Twitter: @neighborworkspr