Builders: Americans Still View Home Ownership Favorably
Original Post Date: June 7, 2011
By: Nick Timiraos
Some people would say that, watching trillions of dollars in equity wiped out, the housing bust would have soured Americans on homeownership. But a survey from the nation’s leading homebuilding trade group says that those people would be wrong.
Three-quarters of respondents said that owning a home is the best long-term investment they can make despite the housing market decline, with 23% of respondents disagreeing. That sentiment is shared most strongly among homeowners (81%) and remains high among renters (67%). But the sentiment is weakest (65%) among those who owe more than their home is worth.
The National Association of Home Builders commissioned the survey to push back against the view that Americans have abandoned homeownership. The real-estate industry has reason to be worried: Regulators have reacted to the financial crisis by proposing lending rules that could raise borrowing costs for future homeowners and a growing number academics and policymakers have called for eliminating generous subsidies for homeowners.
“There has been a disconnect between the media and the American voters and those in Congress who are talking about devaluing or de-emphasizing the importance of homeownership,” said Jerry Howard, the trade group’s president.
Mr. Howard said the poll on homeownership attitudes—something that would have been too-obvious-for-a-poll just five years ago—is also designed to pop a growing bubble of press stories that he says mischaracterize Americans’ appetites for homeownership. ”We read the newspapers, and we read magazines too,” said Mr. Howard.
The concern is that those reports could lead policymakers to mis-diagnose any potential overhaul of housing policies. “We’ve tried to tell people in the media for the last two years that they were overstating“ the extent of Americans’ disaffection with homeownership, but reporters and academics “wouldn’t believe us until we got credible third parties to back us up,” he said. “This poll is our way of dropping the gauntlet.”
The study finds that 95% of all homeowners surveyed are happy with their decision to own a home compared to 5% that are unhappy. (Cynics might ask whether the 5% is comprised primarily of current home sellers, but the survey doesn’t provide that breakdown.) Among underwater borrowers, 17% are unhappy.
Other findings from the survey:
• Underwater borrowers are nearly as likely to advise close friends or family members to buy a home in order to build long-term assets. Some 15% of all respondents say homeownership is too risky, compared to 19% of underwater respondents.
• Just one-quarter of voters who don’t own a home say that homeownership isn’t a goal, with younger voters far more likely to state that they share the goal of owning their own home one day.
• Saving for a down payment and closing costs remains the biggest hurdle to buying a home, with 31% of respondents listing that as their top barrier. Other hurdles include job uncertainty (22%) and credit score (16%).
A separate survey from Fannie Mae shows that a majority of Americans believe homeownership is a safe investment, but that share has declined steadily from 83% in 2003 to 66% in the first quarter of 2011. Still, the Fannie survey showed that 57% of respondents believe homes have more potential as an investment than any other asset.
The NAHB survey of 2,012 likely voters was conducted from May 3-9 by Neil Newhouse, a Republican pollster from Public Opinion Strategies, and Celinda Lake, a Democratic strategist from Lake Research Partners.
Because homeowners tend to vote in higher numbers than renters, the survey of “likely voters” slightly over-represents homeowners. Around 73% of respondents were homeowners, which is higher than the national homeownership rate of around 66%.