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Dream Big!

Survey: 84% think homeownership is a good investment


WASHINGTON – July 13, 2017 – According to the National Association of Realtors®' (NAR) 2017 National Housing Pulse Survey, concerns over housing affordability show clear demographic divides, especially among unmarried and non-white Americans.

More than 50 percent of unmarried, non-white Americans view the lack of available affordable housing as a big problem; only 40 percent of married, white Americans feel the same.

The survey measures consumers' attitudes and concerns about housing issues in the nation's 25 largest metropolitan statistical areas. It found that 84 percent of Americans now believe that purchasing a home is a good financial decision – the highest number since 2007 – but six in 10 are concerned about affordability and the rising cost of buying a home or renting in their area.

Housing affordability was ranked No. 4 out of the top five issues Americans face in their area, behind the lack of affordable health care; low wages and debt making it hard to save; and heroin and opioid drug abuse. Concerns about job layoffs and employment ranked fifth.

Nationally, 44 percent of respondents categorized the lack of available affordable housing as a very big or fairly big problem. In the top 25 densest markets, more than half see the lack of affordable housing as a big problem, an increase of 11 percentage points from the 2015 National Housing Pulse Survey.

Low-income Americans, renters and young women most acutely feel the housing pinch. There is also greater concern about affordable housing among the working class (65 percent) than for public servants such as teachers, firefighters or police (55 percent).

"Despite the growing concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own," says NAR President William E. Brown. "Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top reasons to own a home."

Eight out of 10 believe that the most important financial reason to own a home is that the money spent on housing goes towards building equity rather than to a property owner. Paying off a mortgage and owning a home by the time you retire is the next most important financial reason for buying a home, followed by ownership being a good investment opportunity to build long-term wealth and increase net worth.

When asked about the amount of downpayment needed for a mortgage, four in 10 respondents believe that a downpayment of 15 percent or more is necessary. Seventy percent feel that a reasonable downpayment should be 10 percent or less.

Misperceptions about higher downpayment requirements were most prevalent in bigger cities and by older adults.

Apparent confusion about downpayment requirements most likely added to non-owners concerns about affordability. NAR's Profile of Home Buyers and Sellers found that the median downpayment for first-time buyers has been 6 percent for three straight years and 14 percent for repeat buyers in three of the past four years.

Over 50 percent of respondents strongly agree that homeownership helps build safe and secure neighborhoods and provides a stable and safe environment for children and family members.

The survey also found that four in 10 Americans say paying their rent or mortgage is a strain on their budget. Those most likely to say their mortgage is a strain have incomes under $60,000, are residents of New York City or the Pacific coast, are under the age of 50 and non-white.

Just over half of respondents (51 percent) said they were willing to strain their budget for a better living environment and would pick a neighborhood with better schools and job opportunities even if housing prices are a bigger strain on their budget. Those most willing to strain their budget are disproportionately married, upper income and living in the suburbs.

Overspending on homes is more prevalent in Northeastern cities (36 percent), the Mountain West (34 percent) and the Pacific coast (33 percent).

The 2017 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR's Housing Opportunity Program. The telephone survey polled 1,500 adults nationwide and has a margin of error of plus or minus 2.5 percentage points.

© 2017 Florida Realtors  

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