The housing crisis that spurred the 2008 financial meltdown has made more Americans leery of becoming homeowners, but at the end of the day, owning a home is still part of the American dream.
A new survey by real estate firm Coldwell Banker reveals a shift in homeowners’ mindset of what they want from a home, but the desire to own one remains steady.
“Prior to the recession there was more of a feeling that a home was like a piggy bank,” says Robi Ludwig, a psychotherapist. “Post-recession people have more appreciation for owning their home.”
Coldwell Banker teamed with Ludwig to evaluate consumers’ sentiment of owning a home as the economy and housing markets mend.
The 2008 market meltdown sent home values plummeting after years of unrealistic valuations and borrowing. The survey found that people now approach home buying from a more emotional standpoint rather than an economic one.
“Their home became a place that nurtures the spirit,” says Ludwig. “There is also a back-to-basic kind of mindset.” Instead of wanting a seven-bedroom home with an in-ground pool, consumers are reevaluating what they really need to be happy, she says.
According to the survey, which polled more than 2,100 U.S adults 18 and older, 84% agree people took homeownership for granted prior to the recession; close to three-quarters of survey respondents said Americans now have a greater respect for homeownership than before the recession. The survey, commissioned by Harris Interactive, also reveals that 86% of respondents think people are more closely evaluating how much home they can truly afford before making a purchase.
“People are being smarter and more conservative instead of getting into a situation where they hope they can afford it,” says Ludwig. She adds that lack of job confidence and economic stability is also making reconsider how much home they realistically afford.
More than three quarters of survey respondents identify owning a home as one of their greatest achievements, while a whopping 95% of parents or legal guardians agree it’s important for their children to someday own a home. “People by nature are territorial and like to have their own things,” says Ludwig. “Owning helps people feel more in control and more powerful.”
While the housing meltdown has forced many Americans to renting, the survey found that although people are fine with renting, they view it as a temporary situation as they improve their finances. An overwhelming 94% of respondents say that even with the tough economic environment, they are glad they own a home; 83% of renters say they want to own a home some day in the future. What’s more, 91% agreed owning a home is part of the so-called American Dream; 89% of renters think the same way.
Ludwig says people are renting in many cases because it’s their only option or makes more financial sense because they are just starting out, aren’t committed to living in a certain location or can’t get funding from the bank for a mortgage. Still she says people still view homeownership as an accomplishment and an achievement and eventual. “Buying is still the goal. The thinking around buying has changed a bit.”