Two-thirds Still Prefer Home Ownership to Renting

By:
Kara Johnson | April 06, 2010

Nearly two-thirds of Americans still regard home ownership as preferable to renting, despite the sharp downturn in the housing market and widespread foreclosures, according to a new survey by Fannie Mae.

The national housing survey, released today, focused on both homeowners and renters to determine attitudes toward home ownership as an investment, home financing and the U.S. economy in general.
 
Fannie Mae’s National Housing Survey found that seven out of 10 Americans still believe that home ownership is one of the safest investments available, despite the sharp drop in home values since 2006. That compares favorably with bank accounts, regarded as safe by 74 percent of respondents, and far better than stocks, which only 17 percent regarded as safe.
 
"Despite the recent downturn in the housing sector, Americans continue to value homeownership and think about their homes in ways that go much deeper than the financial investment," said Mike Williams, Fannie Mae president and CEO. "The public also strongly believes in the importance of upholding the financial commitment involved in buying and owning a home, even during these challenging times when home values have fallen."
 

Buying a home seen as more difficult today

 
Three-fifths of consumers (60 percent) said they think buying a home today is more difficult than it was for their parents, and nearly seven in 10 (68 percent) said they think it will be even more difficult for their children. Even so, two-thirds of renters (67 percent) said that they plan to buy a home at some point in the future.
 
The survey also found that respondents overwhelmingly rejected the notion of walking out on an “underwater” mortgage, with nearly 9 in 10 (88 percent) saying it is not acceptable for someone who owes more on their mortgage than their home is worth to stop making payments. That attitude was shared by 70 percent of homeowners who are delinquent on their own mortgages.
 
However, homeowners who knew someone who had already defaulted on their mortgage were nearly twice as likely to seriously consider walking out on an underwater mortgage, regardless of whether they are current or in default on their own mortgages. That suggests attitudes toward voluntary defaults could change if the foreclosure crisis deepens.
 

Most think it's a good time to buy

 
Nearly two-thirds (64 percent) think it is a good time to buy a house right now, with nearly a third (31 percent) saying it is a very good time. This nearly matches the results from 2003, prior to the peak of the market, when 66 percent thought it was a good time to buy. Top obstacles to buying a home, as cited by respondents, were poor credit (22 percent), lack of income (19 percent) and being unable to afford the down payment (15 percent).

 

Nearly three-quarters said they believe housing prices will increase or stay the same in the coming year, with the results almost evenly divided between those who think prices will increase and those thinking they will remain the same.
 
The survey covered more than 3,000 randomly selected participants, roughly divided among three groups: homeowners, mortgage borrowers and renters. Mortgage borrowers included over 300 “underwater” borrowers who owed at least 5 percent more than their home is worth. Another group of 400 delinquent borrowers was polled separately.

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