Over the past few years, Americans have experienced the most significant housing crisis since the Great Depression. The crisis has raised important questions about the demand for homeownership and has prompted us to investigate what influences Americans’ intentions to own or rent their home. Examining the drivers of Americans’ homeownership preferences has important implications for housing industry players. Our study provides insights for better managing housing-related risks and for encouraging consumers to make sustainable housing choices to ensure a well-functioning housing marketplace.
To perform this study, we used all the 12 months of 2011 data from the Fannie Mae’s National Housing Survey. Based on these data, we conducted predictive modeling to investigate which (subjective) attitudes and (objective) demographics best accounted for individuals’ current status as homeowners or renters as well as their intentions to own or rent if they were to move.
In particular, with regards to consumers’ next-move own-rent intentions, we built separate models for three different population groups, as we believe that they generally represent different life stages with respect to housing tenure:
The modeling results shown in the figure below groups the top predicting variables into three categories: Demographics, Housing Attitudes, and Financial Attitudes. Our models show:
We also found that exposure to default, perceived home value appreciation/depreciation, and self-reported underwater status make minimal incremental contributions to predicting the own-rent intention in the models.
The above key findings suggest that:
For more information, please visit the Own-Rent Analysis page within the Research & Analysis section on the Fannie Mae web site.
Li-Ning Huang and Steve Deggendorf
Economic & Strategic Research
August 2, 2012
The views expressed in these articles reflect the personal views of the authors, and do not necessarily reflect the views or policies of any other person, including Fannie Mae or its Conservator. Any figures or estimates included in an article are solely the responsibility of the author.