Owners and renters agree owning a home is a smart long-term decision
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A significant majority of today’s home owners and renters agree owning a home is a smart long-term decision. According to a survey released by the National Association of REALTORS®, 95 percent of owners and 72 percent of renters believe over several years it makes more sense to own a home.
The American Attitudes About Home Ownership survey reported a majority of home owners and a strong percentage of renters “agree” or “strongly agree” that owning a home provides a healthy and stable environment for raising a family and that it helps them meet long-term financial goals. In addition, 93 percent of owners surveyed would purchase a home again.
However, owners and renters do not agree on everything. More than half of owners reported feeling very or extremely satisfied with the overall quality of their family life. Only one-third of renters reported the same level of satisfaction.
In addition to quality of family life, 43 percent of home owners are “very” or “extremely” satisfied with their community life, compared with 30 percent of renters. Home owners also report higher levels of self-esteem and happiness when compared to renters.
Sixty-three percent of renters reported they are at least somewhat likely to buy a home at some point in the future. Out of that group, young adults (18-29 years old) have the strongest aspirations to own a home.
According to a separate study, the primary reason for purchasing a house is the desire to own. The 2010 National Association of REALTORS® Profile of Home Buyers and Sellers found that 53 percent of buyers were motivated by their desire for homeownership. In a Utah study of home buyers, the Utah Association of REALTORS® found the pattern was similar in our state. The No. 1 reason people want to purchase a home is the desire to stop renting and become home owners.
In today’s market, however, many aspiring home owners are faced with worries about job security and creditworthiness. Three out of five renters surveyed who said they are very or extremely likely to buy considered job security and credit worthiness to be obstacles, according to the American Attitudes About Home Ownership survey. Also, 80 percent of renters noted that having enough money for a down payment and closing costs were also obstacles.
While there are obstacles to buying a home today, there are also many advantages: Home prices have come down from their peak and interest rates remain near-record lows. For every 1 percent drop or rise in rates, purchasing power increases or decreases by 10 percent. For example, a drop from 6 to 5 percent is equal to saving $20,000 on a $200,000 home. With today's rates, buyers can purchase a better home for the same price they would have paid for a smaller one only a couple years ago.
Another advantage of home ownership is the fact that buyers can deduct the interest paid on a mortgage from their taxes, which reduces the carrying costs of owning. At tax time, this can result in significant savings.
Support of the mortgage interest deduction was shared by an overwhelming majority of both owners and renters in the American Attitudes About Home Ownership survey. Seventy-four percent of owners and 62 percent of renters say it’s very or extremely important that the MID stay in place.
This survey was conducted online within the U.S. and fielded October 6-20, 2010. A total of 3,793 adults, 18 and older were surveyed, including 1,880 home owners, 1,115 renters, and 798 young adults. All samples came from the Harris Poll online database and were weighted for age, sex, race/ethnicity, education, region and household income to be representative of the U.S. general population of adults 18 and older. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
For more real estate news and information, visit GoAskLilly.com, the new consumer Web site from the Utah Association of REALTORS®. Also contact your local REALTOR® to learn about market conditions in your area.
By Kenny Parcell
Appeared in the Salt Lake Tribune and Deseret News January 29, 2011
February 7, 2011 | Share: