June 9th, 2014
A recent study commissioned by the John D. and Catherine T. MacArthur Foundation found that many renters and homeowners in the U.S. are having trouble affording their homes.
According to the How Housing Matters survey, which was conducted by Hart Research Associates, 52 percent of respondents said they had to make a sacrifice to cover their mortgage or rent. Among these sacrifices were: moving to a more dangerous community or one with worse schools, increasing credit card debt, seeking additional employment, foregoing health care and healthy foods and postponing retirement savings.
During the housing recovery, price appreciation has encouraged more current homeowners to show faith in their homes and potential owners to see the value of buying a home. However, the growing positive feelings toward the U.S. real estate market are offset by many consumers who have yet to see a change, as 70 percent of survey respondents said they believe the U.S. is still in an economic crisis or another economic downturn is coming.
Shifting perceptions of homeownership
Many Americans still look poorly on the idea of owning a home. The housing downturn left lasting effects, some of which have yet to wear off. Furthermore, the resurgence of the housing market has come with its own challenges, such as affordability problems for potential millennial buyers, who more often turn toward renting. Forty-three percent of respondents said that owning a home is no longer a good long-term investment, and 58 percent said that renters can be just as successful as homeowners at achieving the American dream.
Despite the apparent prevalence of negative housing market sentiment, 70 percent of respondents who were renters said they aspire toward homeownership. While current economic conditions may present challenges for potential homebuyers, there are some benefits, such as record-low mortgage rates. Those who want to own a home in the future can do so while ensuring financial stability if they’re prepared.
Here are some questions aspiring buyers should ask before purchasing a home: