Last week we reported that the rate of homeownership remains stagnant. This week we learned of a new survey from the Gallup people that seems to show that could be on the brink of change–maybe even massive change. The survey, conducted among both homeowners and non-homeowners, indicates that more than half of the latter don’t plan to stay that way.
Forty-nine percent of those who don’t currently own one said they expect to buy a home within the next five years, (10% within one year) and another 20% have a ten-year plan. That leaves only 28% with no current intention to buy. When Gallup conducted the same survey in April of last year, 38% of respondents were content with their status quo.
As might be expected, these homeowners-in-waiting are clustered on the low end of adulthood. Fifty-two percent of 18 to 34-year-olds have a five-year window (for more than half, that window is a year) as do 58% of those aged 35 to 54. Less than a third of non-homeowners 55 years or older have homebuying plans.
Let’s hope they can find a home to buy. Gallup says the homeowners it questioned were prepared to stay put. Only 4% expect to sell within 12 months and another 20% within five years. Nearly two-thirds say they won’t be moving “in the foreseeable future.”
April Jobs Report Raises Hopes
The only hard economic numbers this week were those for employment in April. They were much better than those for March (which got even worse in the retelling.) The Labor Department said there were 211,000 new jobs created during the month and the unemployment rate ticked down to 4.4% the lowest rate since 2001. The March report originally reported a dismal 98,000 new jobs; that number was revised down this month by another 19,000.
The chicken and the egg has long been a “thing” in real estate–should a homeowner find a new home before he sells the old one or vice versa. Freddie Mac’s blog this week suggests a variation. When it comes to home buying, the house or the mortgage?
Experts agree, Freddie says, that you should fit your mortgage to your finances, not to a house. The key is knowing, not just to know how much mortgage you can afford, but if your budget can cover expenses for upkeep, utilities and major repairs like a new furnace.
In other words, before there is either a chicken or an egg, there is a need to get a handle on your finances. It’s what we do–give us a call.