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June 3, 1996
Americans Still Optimistic About Home-Buying Climate, More Willing to Sacrifice for Homeownership; But Nearly Half Are Anxious Over Job Security, Fannie Mae 1996 National Housing Survey Shows
WASHINGTON – More than six in ten (61%) Americans believe now is a good time to buy a home, and they are also more willing than they were in 1992 to sacrifice to achieve homeownership. At the same time, while many assert that their personal financial situation will improve in the next year, nearly half (48%) express fears over their own job security, an increase from just a quarter (26%) citing such
employment concerns only one year ago. These are key results from the Fannie Mae 1996 National Housing Survey, released today.
"Fannie Mae's fifth National Housing Survey, conducted by the survey research firms of Peter D. Hart and Robert Teeter, shows that the desire for homeownership reported by the benchmark 1992 survey has,if anything, intensified over time," said James A. Johnson, Fannie Mae chairman and chief executive officer.
The study also reveals that nearly three-in-ten (28 percent) Americans say that current conditions make now a very good time to buy a home. These attitudes represent solid improvement in optimism since 1995, but are still below those levels registered in 1993 and 1994.
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1996
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1995
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1994
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1993
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1992
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Percentage Believing Now Is Good or Very Good Time to Buy A Home
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61
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55
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76
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72
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62
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Behind Americans' optimism regarding homeownership is a bright outlook on their own financial circumstances in the coming months (40 percent believe it will improve; 50 percent say it will stay the same) and an even greater level of willingness than five years ago to make sacrifices and accept certain financial trade-offs, if necessary, to become a homeowner.
By a thirteen-to-one margin, Americans would rather own a home than drive a better car. Nearly seven in ten respondents (67%) say they would put off retirement for ten years in order to own a home, compared to 59 percent in 1992.
Noted Johnson, "Americans are more willing to make the necessary sacrifices to become homeowners, and more willing than ever to work hard and do what it takes to have their families live in a home of their own."
The 1996 survey also shows that a greater percentage of Americans would refrain from taking an extra two weeks of vacation each year if so doing were necessary to buy a home; more than eight in ten (85%) say this now, compared to 71 percent indicating such a level of commitment in 1992. Additionally, while just 63 percent of those surveyed in 1992 said they would choose owning a home over renting within an easy commute to work, more than eight in ten (81%) would make that their choice today.
However, despite apparent deep reservoirs of optimism regarding their personal finances and the home-buying climate, Americans also demonstrate a very real sense of anxiety about elements of financial and personal security. While having enough funds for a down payment and the monthly mortgage payment continue to worry Americans most, by a greater percentage than seen in previous national housing surveys, Americans express concern about job security and finding a good neighborhood in which to live.
Said Johnson: "Obstacles clearly still stand between American families and their dream of homeownership. While there is confidence that the financial situation of one's own family will improve in the next year, there has been a surge in anxiety about whether job prospects will be an obstacle to homeownership. In fact, this democratization of
anxiety about job security is notable across all economic levels, all regions of the country, and is pervasive whether one is white, African American, or Hispanic."
Percentage of Americans Reporting the Following Major Obstacles to Homeownership
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1996
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1995
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Having
enough money for down payment & closing costs
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52
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51
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Having enough income to meet monthly mortgage payments
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50
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44
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Having
enough confidence in the security of your job
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48
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29
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Finding a neighborhood in which you feel confident investing in a home
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43
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29
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As a potential obstacle to homeownership, the survey also shows that among low- to-moderate income renters, nearly seven in ten (67%) indicate that repeal of the Mortgage Interest Deduction would have a moderate to major effect on the amount of mortgage debt they would feel comfortable taking on.
Yet another sign of the nation's strong views on homeownership is Americans' overall agreement that homeownership makes investment sense. According to the survey, even when told that home values may increase much more slowly in the 1990s, an overwhelming number of Americans say that owning a home is a good investment. In fact, nearly three in four (74 percent) adults surveyed report that they would recommend a 30-year-old friend use $10,000 in savings on a down payment for a house, rather than investing in stocks.
Percentage of Americans Saying Owning A Home Is A Good Investment
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1996
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1995
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1994
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1993
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1992
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86
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83
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86
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83
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78
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"In 1996, there are strong signs of optimism among the public about whether homeownership is in reach, both for themselves and for a typical young family. The belief that a home is a positive investment is so strong, even when considering that the pace of home price appreciation is unlikely to match previous decades, that Americans' expressed desire for homeownership lessened not at all," said Johnson.
More than two-thirds (69%) of Americans also say the goal of increasing homeownership in the U.S. should be a very high priority, or one of the top two or three priorities in the country, constituting both a sound financial and social investment. When asked whether they could think of any specific person – themselves, a friend, relative, or acquaintance – for whom buying or owning a home had made a big difference in their life, 60 percent respond that they do know of such a person.
Despite concerns about obstacles to homeownership, some survey respondents see real improvements in aspects of the home-buying process. These include: selection of homes for sale, new mortgage options, and less discrimination. However, Americans believe the paperwork involved in getting a mortgage has gotten worse.
The percentage of Americans who believe African Americans suffer from discrimination in the availability of mortgages all or most of the time has fallen from 36 percent in 1993 to 17 percent today. Among African Americans themselves, the perception of the discrimination they face all or most of the time when applying for a mortgage has fallen from 37 percent in 1995 to 33 percent in 1996.
In other measures of the way Americans live, either by choice or circumstance, not surprisingly, the single-family detached home remains the ideal, but somewhat less overwhelmingly, from 80 percent citing it as such in 1992 to 73 percent in 1996. Among low- and moderate-income renters, about three-fifths would consider several of the other ownership options to the single-family home acceptable.
The 1996 Fannie Mae National Housing Survey involved main sample interviews between April 8-16, 1996 of 1,857 individuals, providing a representative cross section of the population of the United States. In addition, the survey included an oversample of 557 low- and moderate-income renters.
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National Housing Survey 1996