Homeownership Declines in Popularity as Safe Investment
That's a decline of 3 percentage points from the beginning of 2010, when 70 percent felt good about owning a home. In 2003, 83 percent of respondents said that they felt that putting money into a house was a good investment.
"Homeowners and renters alike continue to be wary of taking on risk, and they are less confident in the long-term outlook for housing," said Doug Duncan, VP and chief economist for Fannie Mae.
There was some good news in the Fannie Mae National Housing Survey, which polled homeowners and renters in June and July. A majority of the respondents, 78 percent, said they believe that home prices will remain flat or increase over the next year. And 70 percent said it is a good time to buy a house. Of course, those who need to sell their homes are not feeling as optimistic; 83 percent said it's a bad time to buy a house.
That negative feeling was echoed in the 33 percent of respondents who said that, if they were going to move, they would rather rent than buy a home; that number was 3 points higher than it was in a similar poll conducted in January.
Translation: People are taking a second look at homeownership, wondering if it's all it's cracked up to be.
One potential buyer told the The Wall Street Journal that "owning a home looks like an 'economic trap,' " and that while 10 years down the road he might want to purchase a home, being "mobile and adaptable" is what is most important now.
The inability to move from a home because it won't sell it is one huge reason that people are souring on the idea of homeownership. While many expect housing prices to slowly rise, it can't happen quickly enough for those who need to sell their current home in order to take a job in another town.
National Association of Realtors. And once these homes do sell, economists do not expect prices to rise like they did before the housing bubble burst. Mark Zandi, an economist with Moody's Analytics predicts that home prices might begin rising again by 2013; after that, they will begin to slowly rise at the rate of 3 percent annually. It could take 10 years to return to the peak prices of 2008.
Time magazine reported recently about "the dark side of homeownership: foreclosures, neighborhoods plagued by abandoned properties and decreasing home values, and a nation in which families have $6 trillion less in housing wealth than they did just three years ago."
Not everyone is buying it, of course. The president of the National Association of Realtors responded to the story with a letter stating that research "has shown that home ownership contributes to stable communities helps reduce crime and improves academic achievement." And other housing advocates contend that paying a mortgage is a sort of forced savings.
But for some Americans, purchasing real estate these days is feeling more like a gamble than a sure thing. For them, paying rent may not be the American dream, but at least it lets them pursue other dreams.
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