December 09, 2010Homeownership Aspiration Remains Strong Among Americans
WASHINGTON, DC — A new study released today by Fannie Mae finds that most Americans — both those who currently own their homes and those who rent — strongly aspire to own a home and to maintain homeownership, despite ongoing turmoil in the housing market. However, demographic trends such as fewer married couples and less families with children resulting in shrinking households — combined with financial caution among consumers — are contributing to an increased willingness to rent.
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. Today's release highlights two of the four major themes of this analysis in reports titled, Persistence of the Homeownership Aspiration and Housing Choices Throughout the Lifecycle and the Impact of Changing Demographics. The reports are available on www.fanniemae.com. The remaining two themes from this analysis will be announced next week.
According to the study findings, 51 percent of current owners and renters say that the housing crisis has not affected their overall willingness to buy a home. However, while homeownership aspirations are high for the long-term, Americans have near-term doubts about buying. Overall, according to Fannie Mae's National Housing Survey third quarter results, one-third of Americans (33 percent) would be more likely to rent their next home than buy, up from 30 percent in January 2010. Among renters, 59 percent said they would continue to rent in their next move, compared to 54 percent in January 2010.
The Fannie Mae National Housing Survey is an ongoing research initiative that surveys Americans' attitudes about housing on a monthly basis. The most recent installment of this survey, released in November, showed that aspirations toward homeownership remain strong — well in excess of current homeownership rates — but decisions to buy are tempered by current consumers' cautious attitudes toward home buying in the current financial environment and a more conservative housing finance environment.
"Despite Americans' strong desire to own their homes, our study reveals that life events are greatly influencing families' decision to rent. This trend, coupled with the housing crisis, has caused consumers to approach homeownership with greater caution and thoughtfulness," said Doug Duncan, Fannie Mae Vice President and Chief Economist.
Fannie Mae's research analysis indicates that shifting U.S. demographic and lifestyle trends correlate to consumers' housing decisions, which may have long-term implications for the housing market. For example, married couples historically have been more likely to own than other households, but traditional married couples are a shrinking portion of the population. Additionally, having children has increased the propensity to own a home, historically, although many families with children (particularly single mothers) currently are renting because of financial constraints, and the percentage of households with children is declining overall.
"The data in the analysis aligns with what we're seeing in the market. More Americans are viewing rental housing as an attractive and sustainable housing option. As a result, we remain focused on helping America's working families — many of whom have incomes at or below the median in their communities — live in quality, sustainable, affordable rental housing," said Ken Bacon, Executive Vice President of Fannie Mae's Multifamily Mortgage Business.
The analysis, based on telephone survey interviews with 2,041 members of the United States general population (plus 1,566 additional respondents from geographic areas of interest) and rigorous research by Fannie Mae, compares current consumer actions, attitudes and financial considerations with historical consumer behaviors, market experience and economic conditions. The study identified four key themes of the "owning versus renting" decision-making process, and results are available 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.
Overview of Key Findings
Desire for Homeownership Remains Strong, Despite Housing Turmoil
Decision to Rent is Driven Primarily by Financial Constraints
Americans' Housing Choices Impacted by Lifestyle and Stages of Life
Changing Demographic and Lifestyle Trends May Create Shifts in Housing Market Over Time
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.