Sobering Survey Highlights Housing Crisis Shell-Shock

The American view of the financial importancernof homeownership and awareness of the sacrifices it can entail appear to bernshifting according to results of a recent survey released by the McArthurrnFoundation.  Americans have a lesseningrnconviction that homeownership is the path to financial security and manyrnbelieve that finding affordable housing is a major challenge and one that therngovernment should address.  </p

The second annual How Housing MattersrnSurvey was conducted by Hart Research Associates between April 8 and 14.  Interviews were conducted with 1,366 adults,rnboth renters and homeowners via both landline and cell phone.  A deliberate oversample was pulled of rentersrnand owners who spend more than 30 percent of their income on housing, anrnofficial benchmark of housing distress. </p

The survey found that even thoughrneconomists and housing experts say the housing crisis is behind us, manyrnAmericans are not feeling the relief. rnThere are indications that the public’s views are shifting toward thernpositive, 51 percent feel we are still in the midst of the crises and anotherrn19 percent believe the worst is yet to come. rnMore than two in five adults (42%) believe the housing market todayrncontinues to be a serious problem.</p

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Respondents showed an awareness thatrnthere are challenges for many in their community in finding affordable housing,rnwhether to rent or buy.  Almostrnthree-quarters of those interviewed said it would be very challenging forrnpersons living in poverty to find housing and 58 percent said it would be veryrnor somewhat challenging even for families with average incomes to accessrnaffordable housing.  Large majoritiesrnalso thought young people starting out and families with children needingrnaccess to quality schools would be challenged in a search for housing.</p

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Respondents also expressed concern aboutrnpersons finding suitable housing as they aged. rnTwo-thirds thought that seniors would have a difficult time locatingrnhousing either to meet their physical needs, their financial abilities, or tornstay close to their support network.</p

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More than one in six respondents believernthat a family which is struggling to afford housing must make significantrnsacrifices such as taking an extra job or additional hours at work  (82% very/fairlyrnlikely), stop saving for retirement (73%), accumulate credit card debt (72%),rnor cut back on health care (62%). A majority of adults (55%) believe it is atrnleast fairly likely that such a family will have to cut back on healthy,rnnutritious food, and almost 2 in 5 believe such a family will likely move to arnneighborhood that is less safe or has worse schools.</p

The reportrnsays that this awareness comes in part from personal experience.  Fifty-two percent of all adults have had to make at least one such sacrifice inrnthe past three years to cover their rent or mortgage. While half of all whitesrn(49%) indicate they have made a sacrifice, nearly two-thirds of AfricanrnAmericans (63%) and Hispanics (64%) indicate they have done so. Among allrnadults, 47% report that either now or at some point in the past their housingrnsituation was not “stable and secure,” and among current renters, that figurernis 56%.</p

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Thosernrenters and owners considered “distressed,” that is paying more than 30% ofrntheir income on housing, have made many of these sacrifices at even higherrnrates. Some 62% of distressed ownersrnand 3 in 4 distressed renters (74%) have made at least one of these tradeoffsrnin the past three years. Among those indicating distress in paying their rentrnor mortgage, 27% have stopped saving for retirement, 23% have cut back onrnhealth care, and 23% have accumulated credit card debt.</p

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Most people who do not own a home stillrnhope to do so.  But while 70 percent ofrnnon-owners said they had such aspirations, homeownership is no longer viewed asrnthe vehicle for building wealth that it once was.  Sixty-four percent believe it is less likelyrntoday than 20 or 30 years ago that a family will build wealth and equityrnthrough homeownership.  Only 50 percentrnbelieve homeownership is an excellent long-term investment and 54 percent thinkrnowning a home has become less appealing in the current environment and 51rnpercent think renting has become more appealing.  Nearly six in 10 believe renters can be asrnsuccessful as owners in achieving “the American Dream.”</p

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Largely because of concerns aboutrnaffordable housing, 58 percent of respondents feel that government should berndoing more to insure more of it – both to buy and to rent.  Sixrnin ten believe that “a great deal” or “a fair amount” can be done to solve thernproblem of housing affordability, including 70% of renters and 57% of owners. Arnsolid majority (58%) wants the federal government to invest in both rentalrnhousing and homeownership while understanding there must be tradeoffs.  Forty-seven percent favor elimination of thernmortgage interest deduction for second homes and homes valued over $500,000rnwhile 40 percent oppose this change. rnThose in favor of elimination believe that the money saved should be usedrnfor programs to increase access to low- and moderate-income housing.”</p

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The housing crisis that began morernthan five years ago has left an indelible mark on the attitudes and experiencesrnof Americans,” said Geoffrey Garin, president of Hart Research Associates.rn”Housing affordability has driven a large share of the American people to makernsignificant financial adjustments. Concern and insecurity about the ability ofrnmiddle class Americans to maintain their footing and for people to rise up intornthe middle class is a central theme in America today and this research showsrnthat housing is front and center in these concerns.”

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