Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Housing bust? So what? We still want to own

By Les Christie, staff writer

NEW YORK (CNNMoney.com) -- The American Dream is still alive and kicking, including within immigrant and minority communities, according to a survey from mortgage giant Fannie Mae.

The housing crisis hasn't quenched the homeownership thirst, the company found. More than 51% of people said the bust did not change their willingness to buy a home and an additional 27% said it actually made them more likely to do so.

"The crisis has not put a dent in the desire to own," said Doug Duncan, Fannie's chief economist, "although it may have changed the reasons that people want to own."

The report, the first close analysis Fannie has taken of consumer attitudes about the rent-or-own decision, found that qualitative reasons -- like having the ability to remodel or to send the kids to a better school -- have overtaken financial considerations as the primary motivators for homeownership.

Some misperceptions about financial benefits may help to keep it high.

"People's attitudes don't always line up with empirical facts," said Duncan.

For example, although trillions of dollars of equity were wiped out by the housing bust and millions of people will lose homes to foreclosure, nearly two-thirds of people surveyed still believe purchasing a house is a safe investment. That could be viewed as a major disconnect.

Also, more than half the public thought buying a home was a good idea financially even if they plan to move out in less than three years. That's actually rarely true because transactional costs like real estate commissions, title insurance costs and mortgage fees take a big cut off the top of selling and purchase prices.

Furthermore, a huge majority, 86% of those surveyed, cite income-tax benefits -- mostly the mortgage interest deduction -- as a big reason to buy. That benefit, however, is very small for most homeowners or even nonexistent.

"Lower-income homeowners, for example, don't itemize," said Duncan, "so there is no tax benefit for them at all."

Broad homeownership hopes

Fannie found that no matter what their ethnicity or immigration status, Americans generally share similar positive attitudes toward homeownership, even though there are substantial differences among these groups in homeownership rates.

It seems that economic opportunities, not attitudes, account for much of the variation.

Only 44% of African Americans own homes, for instance, compared with 71% of whites, but that disparity starts to vanish among families in stronger financial circumstances. African Americans' homeownership rises to 60% for those earning between $50,000 and $99,000, for example.

The survey findings have implications for Fannie's business model. Non-Hispanic whites are projected to account for just 46% of the population by 2050. Immigration will account for most of the population growth between now and then.

And since, as the report stated, "strong homeownership aspirations exist across races, ethnicities and immigrant groups," Fannie can count on future demand for owner-occupied homes remaining strong, as long as the economy cooperates. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.84%
15 yr fixed2.88%2.91%
5/1 ARM3.02%3.01%
30 yr refi3.90%3.94%
15 yr refi2.97%3.01%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
  • Find Homes for sale
    Real estate and homes for sale on Trulia

  • Property Type
  • Find a home in: New York | Atlanta | Chicago | Los Angeles
  • Washington D.C | Houston | Philadelphia | More options
Index Last Change % Change
Dow 16,934.53 22.24 0.13%
Nasdaq 4,757.05 -34.10 -0.71%
S&P 500 1,995.45 -0.38 -0.02%
Treasuries 2.08 0.02 1.02%
Data as of 12:39pm ET
Company Price Change % Change
EMC Corp 27.35 1.39 5.35%
Bank of America Corp... 15.63 -0.12 -0.76%
Apple Inc 108.66 -2.12 -1.91%
eBay Inc 23.78 -1.90 -7.40%
Freeport-McMoRan Inc... 13.42 0.42 3.19%
Data as of 12:24pm ET


Volkswagen's headquarters was raided on Thursday by German police investigating the automaker's diesel emissions scandal. More

Facebook will begin testing a set of new emotions and reactions on its platform Friday for users in Ireland and Spain. More

Karim Abouelnaga turned down a job on Wall Street to address a problem that set him back as a low-income student: the summer slide. More

One of the largest pension funds in the country says it needs to cut benefits for 273,000 current and future retirees as soon as July. Otherwise, it won't be able to pay any benefits after 2025. More