According to Fannie Mae’s national housing survey, most Americans across all demographic groups believe that owning a home is preferable than renting it. Out of 3,000 homeowners interviewed during the fourth quarter last year, nearly two-thirds of current renters say that they will buy a house at some point in the future.
At the same time, the margin of Americans believing homeownership has the highest investment potential has declined over the past several years reaching a low of 63% in the fourth quarter of 2011.
“In spite of the impact of the housing crisis on home values and homeownership rates across the country, Americans by and large still hope to become homeowners,” said Doug Duncan, vice president and chief economist of Fannie Mae. “Some may not be financially positioned to own a home in the near future, but Americans may begin to revisit that aspiration as employment and household balance sheets improve over the coming years.”
Those individuals renting today cite poor credit, bad economic times and the complexity of the mortgage process as major factors for not buying a home.
Additionally, renters are consistently more likely than mortgage borrowers to think it would be difficult for them to get a home because of financing problems. The survey said that African-Americans and Hispanics believe it would be hard for them to obtain a mortgage regardless of income level.
Lower income Americans who were surveyed said an obstacle to getting a mortgage is receiving inadequate home loan information from a lender.
However, Duncan said that future improvements in employment and personal finances, a pickup in interest rates in response to stronger economic growth and stabilizing home prices may move Americans to act on their aspirations in the near future.
“A point of concern for the industry is that some consumers find the mortgage shopping process difficult to navigate,” Duncan continued. “If potential homeowners avoid the process because they believe it to be too complex, we will likely see a continued impact on homeownership rates.”