The financial and real estate industry crisis obviously had a negative impact on the American economy, with many individuals and companies seriously affected as well. Millions of homeowners either lost their homes to foreclosure or went “underwater” on their loans. As a result, there has been widespread concern that an increasing number of Americans would reconsider their interest in owning a home.
However, according to the recent study from the Joint Center for Housing Studies at Harvard University, the desire to achieve the American Dream of homeownership has not significantly diminished. “Our review of early research on the impacts of the housing crisis on attitudes toward homeownership suggest that no extraordinary efforts will be needed to attract American households back into the housing market,” the Center said in its recently released paper, Reexamining the Social Benefits of Homeownership After the Crisis.
The study concluded that Americans would still generally prefer to own a home rather than rent. “Even after the dramatic loss of equity and the high foreclosure rates, the early evidence suggests that people seem to believe that, over the long run, owning is still preferable to renting,” the study explained. “The long-term cultural preference for owning seems to have weathered the recent housing crisis.”
The Harvard study cited three key surveys. For example, when asked “If you were going to move and could afford either, would you prefer to rent or buy?” 73 percent of the respondents in a New York Times/CBS poll (June 2011) said they would prefer to buy. In addition, the renters in the sample were asked, “Regardless of whether you think you can afford it, would you like to own someday or would you prefer to continue renting?” Eighty-five percent said they would like to own. Another question asked “How important a part of the American Dream is owning a home?” Eighty-nine percent of the survey participants stated that it was either “very” or “somewhat” important.
In a 2012 National Association of Home Builders survey, renters were asked: “Is one of your goals to eventually own a home?” A somewhat lower, but still substantial, 68 percent of respondents said that homeownership was a goal.
In a poll sponsored by the MacArthur Foundation earlier this year, 72 percent of renters said that homeownership was something that they aspired to.
The Harvard study also noted that prospective homeowners are confident about their ability to purchase a home. “The research on home buying expectations supports the conclusion that very large percentages of Americans still expect to buy a home at some time in the future.”
It pointed out that younger Americans are even more focused on owning a home. “Moreover, the finding that younger renters and owners are more likely than their older counterparts to expect to own bodes well for the future of the housing market.”
The Joint Center for Housing Studies emphasized that additional research should be conducted in order to determine both the perceived and actual non-financial benefits of homeownership after the housing crisis.
(For additional information about Joint Center for Housing Studies research, visit www.jchs.harvard.edu/research)