An estimated 2 million home buyers are poised to take the plunge just as soon as the economy returns from the deep.
Eighty-nine percent of owners and 59 percent of renters feel that homeownership is important to the American family while 87 percent of owners and 73 percent of renters feel homeownership is aneconomic cornerstone, according to Hanley Wood's Housing 360 Survey.That's because Americans still place a high value on homeownership, but qualifying for a mortgage and raising a down payment in an economy that won't produce jobs, keeps many of them sitting on the fence.
Indeed, housing, including shelter itself, household operations, insurance, fuels and utilities, water, sewage and trash services and furnishings, among other expenditures, account for about 40 percent of the Consumer Price Index, an index of consumer expenditures, according to the U.S. Bureau of Labor Statistics.
Approximately one in three renters and about one in five existing homeowners think it's a good time to buy a home and plan to make a move to buy in the next two years, according to the survey.
The survey was electronically delivered to homeowners and renters from a national sample of adults 20 years of age and older in June to early July 2011 resulting in 3,005 results, including 1,954 homeowners and 1,051 renters.
"We thought people would be soured after watching home values fall but instead we found the typical American still places high value on homeownership," said Frank Anton, CEO of Hanley Wood a media company and data research outfit serving the housing and construction industries.
"We found this holds across all demographic groups and across the country, even in hard-hit
places like Nevada and Arizona where there have been 50 percent or more declines in value. The increase in the rise of rental rates in many markets is one factor driving people to consider buying," Anton added.
Survey findings indicate as many as two million potential home buying consumers are waiting to jump into the market when the time is right.
Home buyers and renters said there is no great urgency to buy, due to soft economic conditions. Many of them are satisfied with perching on the fence, for now.
They are perched trying to determine how to overcome the challenges of stiff underwriting and, even though some home prices are half what they were a half decade ago, it's also tough coming up with enough cash for a down paymentand enough left over to show lenders they are viable home loan holders.
"There are obstacles in the way of home buying. The over-correction in the mortgage market is a drag on the process. We've gone from one extreme to the other and it's stalling the housing market and therefore the economy," said Kent W. Colton, president of The Colton Housing Group and senior fellow at Harvard University Joint Center for Housing Studies.
The survey covered 70 questions relating to the decision-making process and attitudes on homeownership, renting, remodeling, financing, home buying, gasoline prices, household relationships, and retirement planning. Sixty two percent of respondents were first-time homeowners.
The survey also found:
• Seventy-two percent of owners and 59 percent of renters think now is a good or very good time to buy.
• Twenty-nine percent of owners and 12 percent of renters would prefer to buy a new home; 34 percent of owners and 41 percent of renters would prefer to buy an existing home. People prefer new homes because they are new and there is less maintenance. They prefer existing homes because they are more affordable and they want to live in an existing community.
• Doubling up/multi-generational trends have increased with 30 percent of respondents saying they've "doubled up" and live with adult children or parents.
• It's a good time to remodel. Forty-two percent of owners say now is a good time to remodel. Top remodeling priorities are maintenance and energy efficiency. Most homeowners will pay for remodeling from personal savings.
• Retiring in place remains popular with 60 percent of homeowners planning to stay in their current home for their entire retirement.
Broderick Perkins Realty Times October 20, 2011