A public opinion poll commissioned by Fannie Mae and released on April 6 suggests that Americans remain positive about the experience of homeownership and its importance to them and the economy, but are perceptibly more cautious when choosing between renting and owning than they were six years ago.
Today more than 80% of Americans say that homeownership is good for the economy, and nearly 85% of the general population say that that it makes more financial sense to own than to rent. However, just 65% said they would own if they were to move today, and the proportion of renters who expect to buy in the next three years is down 5% from a similar poll conducted in 2003. Nearly 70% of renters think it is more difficult now to buy a home today than it was for their parents. Among the general population, the rate is 60%. In the 2003 poll, the corresponding percentages were 62% and 49%.
Despite the headlines about foreclosure, nearly 70% of the general population views purchasing a home as a safe investment, more so than putting money into an IRA or 401 K plan or buying government bonds, an insurance annuity, mutual funds or stocks. However, in the 2003 poll the purchase of a home was the investment most likely to be considered safe by 83% of the population. With a fall of 13 points since then, a home purchase is now second to a savings account, which 74% of the general population rated as safe.
Similarly, a significant shift has also occurred in the expectations for price appreciation. Despite a majority of respondents who feel homeownership is the better financial decision, in 2009 only 37% of the general population expects prices to increase over the next year, compared to 64% who felt that way in 2003. More tellingly, perhaps, in 2003 only 9% of the population expected prices to decline in the next year; in 2009 that number had risen to 23%.
Owners who expected prices to rise were more optimistic about their future financial situation. Just 16% of those expecting a rise in prices said their financial situation would worsen in the next year, compared to 36% of those who expect a decline.
Renters were the most likely to expect stability or improvement in their financial picture. Just 11% expected their family’s financial situation to get worse in the coming year. Fully 79% of renters say renting has been positive for them and their families.
Importantly, the poll finds the decision to buy is primarily related to stage of life and the quality of homeownership neighborhoods and buildings. Among those who have owned a home at any point in their lives, the top two reasons for purchasing a home are getting married (34%) and expanding family (30%). When asked about the reasons to buy a home, the vast majority (80%) of respondents agreed that it is a “good place to raise children and provide them with a good education.” Nearly the same proportion (79%) agreed that a major reason to buy a home is that it provides “a physical structure where you and your family feel safe.” Together these responses suggest the amenities of neighborhoods in which people might own their homes are as important as any inherent value in owning itself for many Americans.
The released poll data provides a wealth of information on attitudes and opinions on a wide range of subjects, including household financial management, the borrowing climate, confidence in lending information, mortgage satisfaction, underwater borrowers, and the act of walking away from a mortgage. The responses are generally split into renters, owners without mortgages, and mortgage holders, who are further split into delinquent and underwater borrowers.
One concern, at least with the publicly released data, is that very few of the graphics and tables include information on income or other economic variables. It is therefore very difficult to tell whether tenure and mortgage status alone play a significant role in respondents’ views and experiences of homeownership and the recession. Race data are more often presented, but only as a broad separate subgroup providing little additional information about the attitudes of owners and renters. Age variables, which are not included, would also be helpful in interpreting the data.
The poll was conducted from December 12, 2009, to January 12, 2010, and resulted in 3,451 telephone interviews. The margin of error for the overall general population is +/-1.77% and is larger for subgroups. The press release, fact sheet, and a presentation on the results can be found here: www.fanniemae.com/about/ housing-survey.html