A Report on the Economic Well-Being of US Households, which covers matters such as housing arrangements and household finances, was recently released by the Federal Reserve Board. The survey was conducted last year and asked both homeowners and renters their opinion about the housing market in their area.
A little less than half of all respondents that were homeowners believed their property value was higher back in 2008 when compared to today’s value. While many felt that their property value was less now than six years ago, there is promise in the fact that over half thought their home’s value was either the same or higher than it used to be. When asked about where they think property values are headed, the vast majority (77%), were confident that prices in their neighborhood and surrounding community would either stay the same or increase in the next calendar year. Less than 10% felt that property values would decrease in their area.
The survey not only asked homeowners and renters their opinion on the market conditions in their area, but also asked renters about finances and reasons for not owning a home. In the four different age groups surveyed, almost half of each indicated that they didn’t have enough money for the down payment on a home. The age range that had the highest percentage for this question was the youngest age group, 18-29 years old, which makes sense due to the fact that they’ve had the least amount of time to save their money and be employed full time. For three out of the four age groups surveyed, at least one-quarter of these age groups indicated they rented rather than owned because they did not qualify for a mortgage. A little over 40% of the age group 45-59 indicated, however, that this was the main reason for them not owning a home.
Although the housing market essentially bottomed out a few years ago, many homeowners have faith that it is recovering and will continue to do so over time. The effects of the housing market crash and recession were different for renters however as it made their access to obtaining a home loan and their ability to save for a down payment much harder.