Economic Conditions Force 27% To Put Homeowner Plans on Hold

More than one-quarter (27%) of American homeowners say that the current economic environment is causing them to put their plans to buy a new or existing home on hold, according to (pdf) a new Ipsos Public Affairs poll conducted on behalf of Realogy.

click to enlarge

Among those who are most likely to say they are putting off a home purchase because of the financial crisis:

• Non-white homeowners (46%)
• Homeowners under age 35 (38%)
• Parents with children under 18 (33%)
• Those with a household income of less than $50,000 (33%)

Despite current hesitation to buy a new or existing home, nine in ten homeowners (91%) agree that owning a home is still the best long-term investment they can make with their money. Nearly three-quarters (72%) say that aside from shelter, they primarily see their current residence as a long-term investment.

Similarly, the majority of homeowners see renting as a waste of money. Some 87% agree that over the long-term, paying rent for housing is like throwing money away, and 95% of homeowners would rather own than rent their homes.

About the survey: The interviews were conducted October 23-25, 2008 by Ipsos Public Affairs among a nationally representative, randomly selected sample of 1,023 homeowners adults across the US. These data were weighted to ensure the sample’s regional and age/sex composition reflects that of the actual U.S. population according to data from the US Census Bureau.

Comments

[DC Housing ...:]

"Similarly, the majority of homeowners see renting as a waste of money. Some 87% agree that over the long-term, paying rent for housing is like throwing money away, and 95% of homeowners would rather own than rent their homes."

This just goes to show up stupid and uninformed most people are and how the media continues to reinforce this misconception. Owning a home is usually a terrible "investment" if you can even call it that. If you run a simple cash flow it would be extremely clear why that's the case. Why people think paying interest to the bank isn't "throwing money away" as well is beyond me. If the current economic crisis is an indicator of anything its how most Americans are completely clueless about their personal finances and economic policy must take into account if we're to avoid these kinds of problems in the futures.

2008 Nov 17 07:00 PM

[eternitus:]

Unbelievable... renting costs about half as much as owning in coastal markets... meaning if you pay 10k in rent, you effectively built 10k of equity by not owning. Of course, this is why many people will remain poor... they think it is worth paying twice as much for something that barely keeps pace with inflation. Somehow, the realtors can pull off the deception.

2008 Nov 17 08:57 PM

[sickofthehype:]

There's many an argument to defeat your 'rent forever' thesis. But that's a choice we all have. Moving every 12 months or so can get old, especially for a family, and calculations of after-tax cost on owning can be cheaper than renting in many areas -

2008 Nov 17 11:08 PM

[Jonathan Ch...:]

In housing as in stocks, there is "A time to hold-um and a time to fold-um".
In housing, as in stocks, if you can buy the house at a price BELOW the cost to build it, you will often end up with a profit, over time, in the right area of the country, and with the right timing.

At present, you can probably buy a home in Southern California, Nevada and Florida at below the cost to replace it. If you can also get an 80% mortgage at 5.5% - 6% you will do fine, in those areas, if you don't overpay, and you can keep it for 5 years.

Those are a lot of caveats folks. I've purchased and sold homes in LaJolla, Honolulu, Maui, and North Carolina and turned reasonable profits.
But timing has been key. I bought a condo in Honolulu for $115,000, from a person that had purchased it for $210,000. I sold it 6 years later for $250,000. Since my initial investment was $15,000, that was a profitable transaction for me - but not the prior owner. The difference was TIMING.

2008 Nov 18 09:55 AM