A recent survey conducted by the National Association of Realtors reveals that the majority of Americans still value the prospect of home ownership. The survey also revealed that this majority is opposed to a new rule requiring a 20% down payment on home mortgages. The qualified residential mortgage rule has been proposed as a way to help reduce the number of future mortgage defaults of the kind that contributed to the financial crisis; however, a majority of current first-time homebuyers said this type of requirement would have prevented them from purchasing their homes. For more on this continue reading the following article from PropertyWire.
Most Americans still believe that owning a home is a solid financial decision, and a majority of renters aspire to home ownership as a long term goal, according to a new survey from the National Association of Realtors.
Its 2011 National Housing Pulse Survey shows that 72% of renters surveyed said owning a home is a top priority for their future, up from 63% in 2010.
Seven in 10 Americans also agreed that buying a home is a good financial decision while almost two thirds said now is a good time to purchase a home.
The annual survey, which measures how affordable housing issues affect consumers, also found that more than three quarters of renters, 77%, said they would be less likely to buy a home if they were required to put down a 20% deposit and a strong majority, 71%, believe a 20% deposit requirement could have a negative impact on the housing market.
‘Despite the economic setbacks Americans have experienced in today’s current climate, it is clear that a strong majority still believe in home ownership and aspire to own a home,’ said NAR president Ron Phipps.
‘However, achieving the dream of home ownership will become increasingly difficult for buyers if they are required to make a 20% down payment, which may be a reality for many of tomorrow’s buyers if a proposed qualified residential mortgage (QRM) rule is adopted. That is why Realtors are strongly urging regulators to go back to the drawing board on the proposed rule,’ he added.
He explained that defining the QRM rule is important because it will determine the types of mortgages that will generally be available to borrowers in the future. As currently proposed, borrowers with less than 20% down will have to choose between higher fees and rates, up 3% more or a nine to 14 year delay while they save up the necessary down payment.
The survey found that over half, 51%, of self-described ‘working class’ home owners as well as younger non-college graduates, 51%, African Americans, 57%, and Hispanics, 50%, who currently own their homes reported that a 20% deposit would have prevented them from becoming home owners.
Pulse surveys for the past eight years have consistently reported that having enough money for a down payment and closing costs are top obstacles that make housing unaffordable for Americans. Some 82% of respondents cited these as the top obstacle, followed by having confidence in one’s job security.
The survey also found respondents were adamantly against eliminating the mortgage interest deduction. Two thirds of Americans oppose eliminating the tax benefit, while 73% believe eliminating the MID will have a negative impact on the housing market as well as the overall economy.
‘The MID facilitates home ownership by reducing the carrying costs of owning a home, and it makes a real difference to hard-working American families. Home ownership offers not only social benefits, but also long term value for families, communities and the nation’s economy. We need to make sure that any changes to current programs or incentives don’t jeopardize our collective futures,’ said Phipps.
When asked why home ownership matters to them, respondents cited stability and safety as the top reason. Long term economic reasons such as building equity followed closely behind. On a local level, respondents said neighbours falling behind on their mortgages and the drop in home values were top concerns. Foreclosures also continue to remain a large concern, with almost half of those surveyed citing the issue as a problem in their area.
This article was republished with permission from PropertyWire.