Majority of Renters Have No Plans to Purchase Home

Amongst continued upheaval in the housing market, that well-worn ideal called the “American Dream” may, surprisingly, no longer include owning a home. A survey released Thursday found that a whopping 70 percent of non-homeowners have no plans to purchase a home within the next year, contributing to what real estate search engine Trulia, Inc. is calling a “crisis of confidence” among U.S. homebuyers.

It may also be a reflection of just how sharply U.S. attitudes towards home ownership are shifting amidst a housing crisis that many believe has no peer in our nation’s history.

“This combination of the mortgage and Wall Street crisis is tantamount to a one-two punch that has knocked the wind out of the American home buying public,” said Pete Flint, CEO of Trulia, in a press statement. The company sponsored the survey of consumers’ attitudes towards owning a home.

Respondents from all age groups said high prices and the inability to get a loan were the leading reasons why they don’t own their primary residence. Nearly half of respondents who fall in the 18-34 year old demographic — usually first-time home buyers — said purchasing a home right now was just too cost-prohibitive. Survey participants ranging from age 35-44 admitted to standing on the “sidelines of homeownership,” because of concerns that they wouldn’t qualify for a home loan.

Of those who currently own homes, 92 percent said they, too, aren’t looking to purchase a new home anytime within the next year. Which could spell outright doom for much of the mortgage origination market, or what’s left of it, as the U.S. economy rolls into 2009 — no wonder industry groups are praying for something, anything to help bolster demand and bring borrowers back.

“The question is how quickly the American psyche will heal,” Flint said.

In light of the recent downfall in home purchases, however, nearly half of home owners — most of them in an income bracket over $50 thousand a year, according to Trulia’s survey — still believe their home is a “great long-term investment.”  And more than half of all non-homeowners believe that home ownership is crucial in achieving their personal “American Dream.” Just not right now, not right here.

“It is the dream of homeownership that — in the end — may help the market rebound,” Flint suggested.

Interestingly, 77 percent of homeowners said in the survey that they haven’t taken equity from their home in the past 24 months. This “offers evidence to help allay some concerns that cheap debt had led many Americans to over invest in their homes,” Trulia officials suggested.

Or it simply means most consumers were already tapped out 24 months ago in terms of the so-called home ATM. Take your pick.

For more information, visit http://www.trulia.com.

Editor’s note: To contact the reporter on this story, email kelly.curran@housingwire.com.