Is the Desire to Become a Homeowner a Thing of the Past? - May 21, 2013
Perspectives on Real Estate Speaker Series
Federal Reserve Bank of Atlanta
Center for Real Estate Analytics
Regional Economic Information Network
Community and Economic Development Group
Demographics and housing is the theme for this year's speaker series, in which distinguished speakers share their insights about demographic trends and their influence on the housing landscape going forward.
Eric Belsky, Managing Director of the Joint Center for Housing Studies, Harvard University
Despite a housing market collapse, a foreclosure crisis, and falling homeownership rates, most Americans across demographic categories still want to own homes.
Indeed, predictions of an emerging "rentership society" are probably off base, according to Eric Belsky, featured speaker at the Atlanta Fed's May 21 Perspectives on Real Estate event. The managing director of the Joint Center for Housing Studies at Harvard University, Belsky's research shows that Americans' deep-seated desire to own a home is not seriously diminished by a downturn that saw average U.S. home values plummet by a third from 2006 to 2011.
Particularly telling, in Belsky's view, is that even younger people still anticipate owning homes. Among a group that tends to be more likely to rent than to own, 19 out 20 people under the age of 45 expect to buy a home at some point, he noted.
"Americans yearn for homeownership," Belsky concludes in his paper, "The Dream Lives On: The Future of Homeownership in America." "Most think it makes more financial sense than renting and plan to buy again or buy for the first time at some point in the future. They associate homeownership with greater control over their lives, less insecurity of tenure, and better communities. Still, their ability to sate their appetite depends importantly on if they get a loan and cover the costs of buying."
That last point is crucial. Even as people by and large still want to own a house, their ability to do so has been "badly impaired by the imposition of tight underwriting standards," Belsky wrote.
This is especially true for minorities. During his talk at the Atlanta Fed, Belsky said that many Americans have traditionally made the down payment on a first home by tapping a source of wealth, for instance, borrowing from family, cashing in a 401(k) retirement account, or drawing on savings. On average, minorities and immigrants do not have access to the same levels of wealth, and therefore have a difficult time securing financing for homes.
For questions about this event, contact Jessica Dill, Center for Real Estate Analytics.