Fannie Mae has released its latest National Housing Survey, which was conducted in June and July 2010 to measure American consumers’ confidence in homeownership as an investment, the current state of respondents’ household finances, and views on the U.S. housing market and the overall economic outlook. These results were compared to similar surveys completed in January 2010 and in 2003. Overall, the findings indicate that most Americans believe home prices have bottomed, but they remain cautious about homeownership and showed an increased preference for renting now and buying later.
The survey questioned nearly 3,400 respondents, both renters and homeowners, including those who are underwater or delinquent in their mortgages. Results show that Americans have a mixed outlook on the future of the U.S. housing market and homeownership. Most Americans (67%) continue to think buying a house is a safe investment, but this is down from 80% in 2003, indicating a big shift in American attitudes about the security of ownership. Seventy percent of Americans think now is the right time to buy a home, up from 64% in January 2010. However, 33% of all respondents said they would rent their next home if they were to move again, up from 30% in January.
According to the survey, Americans believe that rents will increase more than home prices over the next year. Eighty-five percent of Americans think that rental prices will either stay the same (46%) or go up (39%), and they believe that rental prices will increase by 3.6%, on average, compared to only a 0.9% expected increase in home purchase prices. However, even with these expected increases in rental prices, 60% of those who currently rent said they would rather continue renting than buy a house if they were to move (up from 54% in January).
The survey also showed that the views on homeownership diverge among sub-groups of respondents. Mortgage borrowers and borrowers who are underwater (those who report owing at least 5% more on their mortgage than their home is worth) are more optimistic about homeownership than delinquent borrowers (those who have not made a mortgage payment in the past 60 days or more) and renters. Further, the findings indicate that 59% of Hispanics and 59% of African-Americans view a home as a safe investment, compared to 67% of the total population.
In a press release, Fannie Mae Vice President and Chief Economist Doug Duncan said that the survey findings “indicate a return to a more balanced and realistic approach towards housing.” He added that “homeowners and renters alike continue to be wary of taking on risk, and they are less confident in the long-term outlook for housing.”
For further information on the National Housing Survey, including a news release highlighting survey results, a fact sheet, a presentation with extensive information from the survey and a podcast providing an audio synopsis of the survey results, go to: http://www.fanniemae.com/about/housing-survey-091610.html