Americans want to be homeowners

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“It’s not all doom and gloom. We found Americans are optimistic about homeownership despite concerns,” said Steve Berkowitz, Chief Executive Officer (CEO) of Move, Inc. “They’re doing everything they can, from reducing discretionary spending to pay their mortgages, to planning to take advantage of the administration’s new program to stop foreclosures. They’re also working with lenders to modify loans. Even more impactful are numbers that show interest in home ownership is strong as nearly a quarter of all adults plan to buy a home in the next five years.”

That’s right. Twenty-three percent of adults plan to purchase a home during the next five years, according to a new survey commissioned by Move, Inc. the operator of Realtor.com(R), the leading web site for homes for sale. Further, 53.5 percent of those planning to purchase a home are first-time home buyers and the official site of the National Association of Realtors (NAR). In fact, 18.1 percent of those surveyed plan to buy a home this year taking advantage of the $8,000 tax credit recently passed by Congress as part of the Obama administration’s economic stimulus package.

They may already be buying. Existing-home sales rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February, according to the National Association of Realtors (NAR). Sales activity remains soft, however, with this February’s sales level falling 4.6 percent below the 4.95 million-unit level of February 2008. Privately-owned housing starts also increased in February. The U.S. Census Bureau and the Department of Housing and Urban Development (HUD) announced privately-owned housing starts rose 22.2 percent to a seasonally adjusted annual rate of 583,000. In addition, the number of building permits for privately-owned housing units rose 3.0 percent to an adjusted annual rate of 547,000 while housing completions rose 2.3 percent to 785,000. All these levels are significantly below the 2008 levels in the same categories.

Just Looking, Thanks

“The number of buyers looking for homes rose 5 percent in February, and also was 5 percent above a year ago,” said NAR President Charles McMillian, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “It appears most of the increase in buyer traffic occurred in the latter part of the month after the $8,000 first-time buyer tax credit was put in place. At the same time, mortgage purchase applications have risen, so we expect to see sales picking up around late spring.”

Results from the Move, Inc. survey indicate potential buyers are watching real estate prices more closely today than 12 months ago, as well. Nearly half (49.6 percent are paying more attention to home values today than they were last year. This is especially true among potential buyers between the ages of 25 and 34. The median age for first time buyers is 30.

Changing Attitudes

Americans’ attitudes towards owning a home are changing as well. Results from the Move, Inc. survey reveal that 62.5 percent of participants consider their home primarily a place to live rather than an investment. Those earning $50,000 or more annually are most likely to consider a home an investment while those earning between $30,000 and $39,000 or up to $20,000 are most likely to view a home as a place to live. The survey also indicate 10 percent of homeowners value space over other options including energy saving features (6.8 percent), bigger or nicer yard (6.1 percent), a better location (4.2 percent) or updated amenities (3.4 percent).

According to the Move, Inc. results, the top three solutions that would have the greatest impact in stabilizing the housing market are cracking down on mortgage fraud (56.9 percent), lower interest rates (51.6 percent) and giving first time home buyers tax breaks as incentives to buy (43.5 percent). Opinion is split over whether the government is doing enough to stabilize the housing market with 46.2 percent saying enough was being done and 43.8 percent saying still more action needed to be taken.