One in Five Americans Plan to Buy a House: Report
While half of all Americans are concerned they or someone they know will face foreclosure in the next six to 12 months, 23 percent of adults plan to purchase a home in the next five years, and 53.5 percent of them happen to be first time homebuyers, according to a new survey commissioned by Move Inc., released Monday. The Move survey found the housing downturn, now entering its third year, has created demand for homeownership especially among first-time homebuyers. While 5.8 percent plan to purchase a home in the next 12 months, 12.8 percent of Americans say they plan to buy a home in the next two years and 11 percent plan to purchase a home in two to five years. However, it's important to remember the majority of Americans -- four out of five -- do not plan to buy a house in the next five years. And amid housing turmoil, homeowners have revealed changing attitudes towards owning a home. About two-thirds of homeowners now consider their home primarily a place to live as opposed to an investment, the survey said. The Move survey also found nearly one out of five homeowners plan to take advantage of the administration's new program to help prevent foreclosures. While wading the waters of a severe economic downturn, 21 percent of all homeowners with a mortgage contacted a lender to restructure their loan over the past year. Unemployment is the driving factor causing many Americans to fear foreclosure, according to Move, Inc.'s findings. Over 27 percent of adults feel they or someone they know may default on their mortgage due to recent unemployment, future unemployment or because they owe more on their home than it's worth. Determined to remain in their homes, 72 percent of adults reduced spending in the past year in order to make monthly mortgage or rent payments, mostly by cutting discretionary spending such as vacations, entertainment and eating out. Regardless of age, most Americans are cutting spending back from some aspect of their life to pay housing costs, according to the survey. But "It's not all doom and gloom," said Move, Inc., CEO Steve Berkowitz. "We found Americans are optimistic about homeownership despite concerns. 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." The survey found 18.1 percent of homebuyers plan to buy this year in order to take advantage of the $8,000 tax credit granted under the Economic Stimulus Plan. But nearly half said they didn't know about the credit and 29.3 percent said it wasn't large enough for them to act right now. It seemed potential homebuyers with higher incomes are more interested in the tax credit than those in lower income brackets, as 43.4 percent of first-time buyers earning $50,000 or more say they plan to use the tax credit. Move Inc. said the overall economy is by far the most pressing issue on the domestic agenda in the opinion of Americans, according to their findings. Opinion is split, however, over whether the government is doing enough to stabilize the housing market, with 46.2 percent indicating "yes" and 43.8 percent indicating "no." Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.