December 10, 2010Aspiration to Own a Home Is Strong Across Ethnicities and Regions
WASHINGTON, D.C. — Fannie Mae today released the second installment of its 2010 Own-Rent Analysis, with highlights of the last two of the report's four major themes: Renting and Owning Behaviors by Race, Ethnicity, and Immigration Status and Economics of Owning and Renting Through the Cycle and Across Geographies. Highlights of the first two themes were announced last week, focusing on the finding that despite the housing crisis, Americans maintain a strong desire to own a home. Today's highlights explore attitudes and behaviors toward homeownership among ethnic groups and immigrants and the economics of owning and renting over time and by geographic region.
According to the study, all racial and ethnic groups polled, as well as immigrants, strongly aspire to own a home, despite current disparities in homeownership rates for these groups. Additionally, if personal finances improve for these groups as they continue to grow in number, homeownership rate disparities may not persist. However, the analysis also found that if homeownership rates by race and ethnicity remained constant at 2009 levels, projected homeownership would decline fairly steadily until 2050.
"Our study gives us reason to believe that the homeownership rates for ethnic groups and immigrants will be higher than indicated solely by the projected growth of the racial and demographic population," said Doug Duncan, Fannie Mae Vice President and Chief Economist. "We routinely conduct research like this to help us better understand the views of homeowners and renters across specific demographics so that we can provide the best support possible for the market."
On the geographic front, residents of Cleveland, Ohio; Phoenix, Arizona; and Seattle, Washington were surveyed to measure attitudes and behavior differences in cities with distinct real estate market characteristics. The analysis found that despite dramatically differing housing markets and percentages of underwater and delinquent mortgage borrowers, residents of all three cities have similar, positive views about the benefits of owning for both financial and lifestyle reasons.
The Fannie Mae 2010 Own-Rent Analysis is based on extensive primary research with homeowners and renters (including focus groups and a quantitative survey), U.S. Census Bureau data, and micro- and macro- economic parameters, and explores the factors influencing consumers' decisions to buy or rent a home. The analysis compares current consumer actions, attitudes, and financial considerations with historical consumer behaviors, market experience, and economic conditions. The results of the study were published in a series of themed reports that cut the data across consumer life stage; ethnicity/race/immigration status; and demographic, geographic, housing, and economic status. The reports are available on www.fanniemae.com.
According to U.S. Census Bureau forecasts, the population is predicted to become more racially and ethnically diverse, and most population growth will come from immigrants and their descendants.
Strong homeownership aspirations exist across races, ethnicities, and immigrant groups, indicating that current disparities in homeownership rates may not persist in the future, particularly if personal finances improve.
Homeownership rates converge regardless of race, ethnicity, and immigration status among people with higher incomes. And for immigrants, homeownership also increases with tenure in the U.S.
While overall homeownership rates are fairly similar across Cleveland, Phoenix, and Seattle, home prices and unemployment rates varied, contributing to very distinct real estate markets.
Despite these differing housing market histories, residents of all three cities have similar, positive views about the benefits of owning for both financial and lifestyle reasons:
In addition to examining attitudes and behaviors toward homeownership by ethnicity, immigrant status, and geography, the analysis looked at the economics of owning and renting. According to the analysis:
The complexity of weighing both financial and lifestyle factors when deciding whether to own or to rent may result in some people favoring homeownership over renting, even if renting is the more beneficial housing decision.
Penn Schoen Berland, in partnership with Oliver Wyman, conducted telephone interviews with 2,041 members of the United States general population plus 1,566 additional respondents from geographic areas of interest. To inform the survey design, focus groups were held in Washington, DC and Phoenix, Arizona during July and August 2010. The telephone interviews were carried out during August and September 2010. In addition to the focus groups and telephone survey, additional research was conducted to evaluate the survey findings comparatively with historical market experience.
For more information about the analysis, click here.