Americans losing faith in mortgage loans and real estate
Americans are becoming less convinced that getting mortgage loans to buy real estate is a good idea. A recent survey found that the number of people who believe owning a home is a worthy investment has dwindled to the lowest level in years. Home sales have been sluggish to recover from the housing crash.
Fewer see homeownership as good investment
American real estate has been shaken to its core during the past few years. One of the side effects has been that fewer people believe homeownership is something to aspire to and that owning a home is not as good an investment as once thought, according to Reuters. Mortgage investment house Fannie Mae performs a quarterly survey on attitudes about home ownership, called the National Housing Quarterly Survey, which found that 64 percent of respondents believed that the tradition of going to a bank or loan company to get a loan and buy a house was a good investment. That marked a declined from early 2010, when 70 percent of respondents thought so. In 2003, the figure was 83 percent.
More people turning to rentals
As fewer are buying houses, more are going with paying landlords instant cash through renting. The percentage of vacant rental units declined over the fourth quarter of 2010 to 9.4 percent from 10.3 percent in the summer of 2010. That is the lowest percentage of available rental units since 2007. The same survey from Fannie Mae found that nearly 75 percent of respondents said they thought it would be harder to get a mortgage from a loan lender than to rent.
Home sales fall
New home sales plunged over the month of January 2011, according to CNN. Some areas where prices are dropping are able to sell more inventory, but areas like Arizona and other places with highly inflated prices have difficulty liquidating housing inventory. However, after stops and starts over the fall, new home sales fell 11.2 percent over January 2011, marking an 18.2 percent reduction between January 2010 and January 2011. The housing market is down more than 80 percent overall from a peak point in 2005.