Home Ownership is Still a Dream, If Not a Reality Right Now
The American dream of owning a home is still alive and well, but a large percentage of Americans today feel that for now, renting might be the better option.
With home prices still falling and foreclosures still flooding the market, just 65 percent of those surveyed in CNBC's All-America survey said they are better off owning than renting, far less than the 89 percent who favored owning back in 1996.
On the bright side, Americans do feel better about their home values, and that is vital given that home equity is such a key driver of consumer spending. If we feel richer, we buy more.
Twenty-two percent of those surveyed believe their home values will increase in the next year. That's up from 15 percent last quarter and the highest level in two years, albeit less than half of the 50 percent who expected home price appreciation in March 2007, when housing was about to fall off a cliff.
Fifty-eight percent said they expect prices to stay flat, while 20 percent say home prices will continue to lose value.
Analysts who watch housing for a living are all over the map on this question, some predicting further price drops of up to 10 percent, while others claim prices have bottomed.
It does seem that Americans are more realistic about their home values, with fewer now saying their home is worth more than they paid for it.
Strangely, though, a majority (52 percent) of those who lost money on their largest investment, i.e. thought their home was worth less than when they bought it, still said they did not want any more government intervention in housing. Fifty-three percent of all those surveyed said no to more bailout.
Housing has long been a primary driver of the U.S. economy; money spent on a home and money taken out of home to buy other things have fueled U.S. businesses and labor.
The good news is that 73 percent of Americans still believe owning a home is an essential part of the American dream, unchanged from the survey’s findings a year ago.