This is a guest blog post by Lora McCray, NAR’s Manager of Housing Opportunity.
Last month the NAR’s Housing Opportunity program released the findings from its 2011 Housing Pulse Survey, which is an annual survey we conduct to gain information on consumers’ attitudes and concerns about affordable housing. We wanted to get a sense, particularly in the current economy, of people’s attitudes about affordable housing opportunities and homeownership and what they expect to see in the future.
The news release on the survey can be read by clicking here. Within that is a link to the entire survey and a report highlighting key findings. The survey was conducted by American Strategies and Myers Research & Strategic Services. We polled 1,250 adults nationwide, with an oversample of interviews of those living in the 25 most populous metropolitan statistical areas (MSAs) so we could compare the 2011 results with past surveys that focused solely on the top 25 MSAs.
Despite the economic setbacks Americans are experiencing in today’s climate, it is clear that a strong majority still believe in home ownership and aspire to own a home. The survey revealed that most Americans still believe that owning a home is a solid financial decision, and a majority of renters aspire to home ownership as a long-term goal. 72 percent of renters surveyed said owning a home is a top priority for their future, up from 63 percent in 2010. Seven in 10 Americans also agreed that buying a home is a good financial decision while almost two-thirds said now is a good time to purchase a home.
We also asked some questions regarding recent calls for a 20 percent down payment requirement on home purchases. Pulse surveys for the past eight years have consistently reported that having enough money for a down payment and closing costs are top obstacles that make housing unaffordable for Americans. And this year, eighty-two percent of respondents cited these as the top obstacle, followed by having confidence in one’s job security. With downpayment such a major challenge for homebuyers already, the idea of a required 20% downpayment doesn’t bode well for restoring the housing market.
The survey found that more than three quarters of renters (77 percent) said they would be less likely to buy a home if they were required to put down a 20 percent down payment on the home, and a strong majority (71 percent) believes a 20 percent down payment requirement could have a negative impact on the housing market. The results further suggest that such a requirement would keep groups currently underserved by the mainstream market out of the game. Over half – 51 percent – of self-described “working class” home owners as well as younger non-college graduates (51 percent), African Americans (57 percent) and Hispanics (50 percent) who currently own their homes reported that a 20 percent down payment would have prevented them from becoming home owners.
We also asked respondents their thoughts on possible elimination of the mortgage interest deduction (MID) as a way to reduce the deficit. Respondents were adamantly against eliminating the mortgage interest deduction. Two-thirds of Americans oppose eliminating the tax benefit, while 73 percent believe eliminating the MID will have a negative impact on the housing market as well as the overall economy.
Overall the survey reflects that people continue to want to purchase a home of their own for the same reasons they have historically. When asked why homeownership matters to them, respondents cited stability and safety as the top reason. Long-term economic reasons such as building equity followed closely behind. Given these responses, it is no surprise to me that foreclosures continue to remain a large concern, with almost half of those surveyed citing the issue as a problem in their area. People want to see their neighborhoods stabilized and secure.