UK residents expressed more positive long-term sentiments about the housing market, in a recent survey, than Americans did. While young adults in the United Kingdom expressed the strongest desire to own a home, less than half of them felt that it was likely they would buy a home in the short term. See the following article from HousingWire to learn more.
The current recession and financial crisis hasn’t touched homebuyer sentiment in the United Kingdom. According to a survey done by the UK Council of Mortgage Lenders (CML), 85% of respondents cited they hoped to own a home in the next decade. The last time the survey was taken in 2007, the beginning of the crisis, 84% of UK citizens surveyed responded identically.
That beats out the 70% of Americans that believe right now is a good time to buy a home, reported Fannie Mae in its national housing survey released today.
Though they have hope for the long-term, UK survey respondents are less confident about living in a home in the near future. Seventy-six percent said homeownership was their ideal tenure in the next two years, down from 78% in 2007.
Americans, however, are less hopeful. In August, first-time homebuyer activity fell to the lowest level since March, accounting for only 39.1% of mortgage transactions, according to a survey by Campbell Surveys and Inside Mortgage Finance. One reason, suggested economists at the Federal Reserve Bank of Philadelphia, is that borrowers feel the costs of homeownership outweigh the benefits.
Fannie Mae reported today that 33% of respondents to their survey said they would be more likely to rent than own when they move next.
CML said its survey signifies a lower short-term appetite for homeownership among young adults (ages 18 to 24), 42%, although they are the demographic with the largest aspiration to own a home, 88%.
CML’s director general, Michael Coogan, believes that even with long-term consumer sentiment at strong levels, by the time these people go to buy a home it will be an increasingly difficult task.
“The unintended consequence of regulatory change is that it is going to be permanently tougher for people — especially young people — to fulfill that aspiration,” he said, “even if they are responsible with their finances.”
American youth is in line with that trend as well. A study released by CoreLogic in late August suggested homeowners with first-time loans purchases are typically younger borrowers with more living expenses and less savings. At the beginning of this month, the Federal Housing Authority reported that refinance applications in July exceeded loan purchase applications for the first time in six months.
The CML report said its findings about young adults “likely reflects younger people’s lifestyle choices, favoring more flexibility and mobility in the short term, as well as a realistic assessment of the difficulty of entering the housing market under current affordability conditions.”
The Council of Mortgage Lenders is a group of banks, building societies, and other lenders who undertake about 94% of all residential mortgage lending in the UK. It surveyed 2,056 adults randomly selected by research firm YouGov.
This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate analysis site.