Housing affordability continues to be the crux for concern among homeowners and potential homebuyers, making them more likely to move less often and thereby contributing to the shortage of existing homes on the market, according to Fannie Mae’s latest National Housing Survey published on Wednesday.
For the survey, Fannie Mae asked current homeowners and renters whether their current home was affordable; assess their perception of affordability trends where they lived; the trade-offs they made in purchasing or renting a home.
According to the survey, both renters and homeowners are more likely to be concerned about finding affordable housing than they are about the affordability of their current housing. “Of particular relevance to the home sales market is that 8 percent of owners with a mortgage reported that their mortgage was not affordable, while 45 percent of owners think that affordable housing is difficult to find in their area” wrote Mark Palim, VP and Deputy Chief Economist of Fannie Mae, on the GSE’s blog about the survey’s findings.
The survey revealed that as a result of this concern, homeowners were reluctant to move as 44 percent of the homeowners surveyed saying that housing had become “less affordable over the past few years,” thereby contributing “to the shortage of existing homes on the market.”
The survey found that compared with renters, current homeowners were also more satisfied with their community and its different characteristics, such as proximity or access to work and the quality of local schools and stores.
Renters, in fact, who tend to be seen as the largest pool of potential homebuyers, said that while owning a home made more financial sense, it would be difficult for them to get a mortgage, the survey revealed.
However, Palim said that higher income renters (in absolute terms and relative to area incomes) were more likely to report that their rents were unaffordable. “This perception may explain the growth in homeownership over the past two years and the importance of first-time homebuyers in the purchase mortgage market,” Palim said.
Both renters and homeowners are also getting frugal so as to afford a home, the survey found with more than half of the survey respondents, especially renters, saying that they were cutting back on expenses, not taking vacations, and were living with roommates to afford the house.