The “American Dream” may be frayed around the edges, and carved out in the center — especially here in the Golden State where high home prices and low inventory limit opportunity — but homeowners and renters truly believe that owning a home is the essence of that dream.
Three out of four non-owners believe homeownership is part of the story. Nine out of 10 current homeowners agreed.
In many instances, if the respondents to a fresh national consumer survey don’t own, it’s not for lack of desire.
It typically boils down to a simple fact: They cannot currently afford a mortgage.
Those are findings culled by the National Association of Realtors’ Aspiring Home Buyers Profile, which attempted to capture the housing expectations and sentiments of non-homeowners — both renters and those living with a family member.
Over the last quarter of 2018, 43 percent of non-owners said they did not own a home because they were not in a position to purchase.
That was down from the third quarter of 2018, when 49 percent of non-homeowners answered the same.
Also, in the 4th quarter, 33 percent of non-homeowners said they do not own because current life circumstances are not suitable for ownership, while 16 percent said they need the flexibility of renting.
In addition, the survey looked at the main reason why non-homeowners would buy a home in the future.
Throughout 2018, 28 to 31 percent of renters said an improvement in their financial situation would be the top reason that would encourage them to buy a home in the future. Makes sense. Why rent if owning is within reach financially?
Throughout 2018, another 26 to 30 percent of non-owners said a change in lifestyle — such as getting married, starting a family or retiring — would be the primary reason they would make a future home purchase.
“The lack of affordable and moderately priced homes has forced non-homeowners to delay achieving that part of the American Dream,” said Lawrence Yun, NAR’s chief economist. “However, as the survey confirms, significant lifestyle changes like marriage or starting a family often spur non-owners to pursue home-ownership.”
In other words, kids happen.
Yet even when life and circumstances are screaming for a home purchase, the lack of affordable housing causes too many potential buyers to hold off. That is the fate of far too many Southern Californians.
For this year’s survey, homeowners and non-owners were also asked about adult family or friends moving into their homes, the span of time this person lived within the household, and if they thought about moving to a new home because of the change.
According to the survey, 11 percent of homeowners had an adult child move into their residence, while 5 percent of non-owners had an adult move into their home.
Of those who had someone move into their home, 44 percent said that the individual intended to live with them for over one year or to stay permanently. Eighty-eight percent of those surveyed who had someone move into their home reported that their living situation remained acceptable and therefore did not warrant consideration of moving into a different home. Twelve percent said they did consider moving or ultimately did move due to their home situation changing. And 2019?
“While home sales were slightly down in 2018, there is still a sizable pent-up housing demand,” Yun said. “Economic growth, interest rates, and the supply of moderately priced-homes will dictate how well the real estate industry will do this year.”
Amanda Etcheverry is the 2019 chair of the Santa Clarita Valley Division of the 10,300-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from a Realtor or other realty related professionals.