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Themes 1 and 2 of Fannie Mae's 2010 Own-Rent Analysis

December 9, 2010

Themes 1 and 2 of Fannie Mae’s Own-Rent Analysis include research titled:

  • Persistence of the Homeownership Aspiration; and
  • Housing Choices Throughout the Lifecycle and the Impact of Changing Demographics.

Downloads and Related Links
Press Release
Theme 1: Persistence of the Homeownership Aspiration (PDF)
Theme 2: Housing Choices Throughout the Lifecycle and the Impact of Changing Demographics (PDF)
Own-Rent Analysis Fact Sheet (PDF)

Overview of 2010 Key Findings

Own-Rent Analysis

The desire for homeownership remains strong, despite housing turmoil.

  • Fifty-one percent of those surveyed reported the housing crisis had little or no impact on their intentions to buy or rent, versus 27 percent who said they are more likely to buy and 19 percent who said they are more likely to rent.
  • The substantial majority of homeowners (89 percent) as well as nearly half of renters (44 percent) believe they would be better off owning their homes, given their current financial situations.

The decision to rent is driven primarily by financial constraints.

  • Lifestyle considerations are more likely to influence consumers' decision to buy a home, while the decision to rent is driven primarily by financial considerations.
  • More than half (57 percent) of renters believe financial benefits are the best reason for renting a home. Based solely on current household finances, 52 percent believe they are better off renting, compared to 24 percent among the population at large.
  • From January 2010 to third quarter 2010, the percentage of renters who say they will probably continue to rent in their next move increased from 54 percent to 59 percent.
  • Per Fannie Mae calculations as of December 2010, 64 percent of renters who do not plan to own and half (50 percent) of those who do plan to own probably do not have sufficient income to qualify for the mortgage on a median-priced home.

Americans' housing choices impacted by lifestyle and stages of life.

  • Single (unmarried) respondents are least likely to own and report the lowest level of satisfaction with their housing choices. After controlling for age, income, wealth, and a number of other factors, regression analysis indicates that married/partnered couples are 2.5 times more likely to own than other respondents.
  • Respondents with children generally have higher homeownership rates than those without children after controlling for age and income, and having children is cited as a major reason to buy a home by approximately three quarters (76 percent) of the general population.
  • Americans 50 and older are more likely to believe they are better off owning than renting than any other age group, and are increasingly able to realize homeownership aspirations as they age. A person age 65-74 is 3.5 times more likely to own than a person under 25.
  • The housing crisis has had the greatest impact on younger Americans. Since the housing crisis, homeownership for people 25 to 29 years old has declined 11 percent since peak rates, compared with a decline of 5 percent among those 35 to 44 and less for those 45 and older.

Changing demographic and lifestyle trends may create shifts in housing market over time.

  • Married couples, statistically most likely to own a home, represent a shrinking portion of the population – 50 percent of households in 2009, compared with 56 percent in 1990.
  • Although having children increases consumers' propensity to own a home, renters are more likely than owners to have children under 18 living at home.
  • In particular, 58 percent of single mothers rent, versus 32 percent overall for households with children under the age of 18.
  • The percentage of families with children is declining overall and reached an all-time low of 45 percent in 2009.
  • Homeownership rates increase with age, and the U.S. population is experiencing an aging trend fueled by the baby boomers. Thirty-eight percent of households were headed by someone 55 or older in 2009, versus 35 percent in 1990.
  • Possibly reflecting changing demographics and economic caution, recently the size of new homes has begun to decrease, reversing a long-standing trend of more space per person. There has been a 6 percent decline in median square footage of new homes from the peak of the housing bubble in 2006 to the second quarter of 2010.

Survey Methodology

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.