Friday, July 06, 2012
Real estate valuation company Integra Realty Resources (IRR) found that even after home prices slid an average 54.2 percent during the housing downturn, three out of four Americans want to be a homeowner and consider it a major goal in life.
The study surveyed non-homeowners ages 22 to 50 in 11 major U.S. markets, and found that 75 percent of those surveyed reported that owning a home is important.
Virtually the same percentage of those planning to buy who are 30-years-old or older gave "I have always dreamed of owning my own home," as a reason to buy.
However, more than 60 percent don't plan to buy a home soon.
Particularly among younger households, consumers are significantly concerned about job security and their inability to save enough cash for a down payment.
The survey said 31 percent of respondents are not planning to buy a home because they lack a down payment. Down payment levels escalated after the market crashed and lenders became more stringent to reduce their risk.
"The down payment conundrum continues to suppress demand with no easy resolution in sight. For this reason and the continuing foreclosures is why the homeownership rate is decreasing. Some respondents feel that purchasing a home may be too risky in the near future," says Benjamin Loughry managing partner at IRR-Dallas/Fort Worth.
Another 24 percent said they weren't buying now because they are afraid of making a bad investment and 21 percent said they weren't purchasing a home because they are concerned about the uncertain economy.
"Clearly, the American dream of homeownership lives on, but some respondents feel that purchasing a home may be too risky in the near future," said Jeffrey Rogers, president & COO of IRR.
However, slightly more non-homeowners under the age of 30 are more positive about the importance of homeownership than older counterparts - 47 percent of respondents under 30 feel owning a home is very important, compared to only 41 percent of respondents over 30.
Those who plan to buy a home are fully aware of current market conditions and opportunities - 85 percent of potential buyers indicated that market conditions are favorable for purchasing a home. Prices are low and interest rates are at historically low levels, but low inventories have begun to push prices higher.
"While many young professionals are seeking to purchase a home, this may not be a reality for the bulk of the population. For those not planning to buy a home, 34 percent indicated that market conditions are not ideal," said Raymond Cirz, CEO, chairman and managing director of IRR-New York City.
Said Rogers, "It's still about employment, confidence, and the income that a good job provides, rather than historically low interest rates."
Regionally, respondents in Detroit were least likely to purchase a home in the next year, with 69 percent abstaining. Thirty-six percent of Miami respondents were unsure about their home buying future.
Of the 39 percent of adults who plan to buy a home in the next year, the survey found that 67 percent plan to buy a single-family home, 16 percent plan to buy a condominium, 11 percent a townhouse and 5 percent a co-op.
Those who intend to purchase a home in the next year tend to be married, college-educated males between the ages of 31 and 35 with household incomes between $75,000 and $150,000, the survey found.
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