Study Says Homebuyers Still in the Market

A survey conducted for Move Inc., Los Angeles, found that 23% of adults plan to purchase a home in the next five years, and more than half of them (53.5%) are first time homebuyers. Despite today's challenging market conditions, 18.1% of adults plan to buy a home this year in order to take advantage of the $8,000 tax credit recently passed by Congress in the administration's economic stimulus package. Another finding was that 18.9% of respondents plan to take advantage of the Obama administration's foreclosure prevention plan. Just over half of the respondents, 52%, said they are concerned they or someone they know will face foreclosure in the next six to 12 months. In the past 12 months, 21% of respondents with a mortgage contacted a lender to restructure their loan. Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer. Nearly three-quarters (72%) of adults reduced spending in the past year in order to make monthly mortgage or rent payments, mostly by cutting discretionary spending such as vacations, entertainment and eating out (75%), personal items such as clothing, personal care and personal luxuries (72%) and energy costs such as gasoline and utilities (71.6%). "It's not all doom and gloom. We found Americans are optimistic about homeownership despite concerns," said Move Inc., chief executive Steve Berkowitz. "They're doing everything they can, from reducing discretionary spending to pay their mortgages, to planning to take advantage of the administration's new program to stop foreclosures. They're also working with lenders to modify loans. Even more impactful are numbers that show interest in home ownership is strong as nearly a quarter of all adults plan to buy a home in the next five years."