AP poll: More avoid buying homes
WASHINGTON (AP) - April 14, 2008 In a vivid sketch of how the sputtering real estate market is
causing distress throughout the country, the Associated Press-AOL
Money & Finance poll found that more than a quarter of homeowners
worry their home will lose value over the next two years. Fully one
in seven mortgage holders fear they won't be able to make their
monthly payments on time over the next six months.
"This is a great time to buy, but not necessarily to sell,"
said Robert Jackson, who lives in a two-bedroom house in Ferguson,
Mo., with his wife and four young children. He said he would love
to purchase a larger home, but can't because even if he found a
buyer, he would probably lose thousands on his house, which he
bought less than two years ago.
"We're just going to have to slap a Band-Aid on it and stay
here until the market gets a little bit better," Jackson, 30, said
in a follow-up interview.
Jackson is not alone. Sixty percent said they definitely won't
buy a home in the next two years, up from 53 percent who said so in
an AP-AOL poll in September 2006. At the same time, just 11 percent
are certain or very likely to buy soon, down from 15 percent two
years ago.
The growing reluctance to dip into the housing market seems to
stem partly from worry that housing prices will continue falling -
good if you're buying a house but bad if you have to sell one.
The number envisioning falling prices in their area has grown to
one in four, while four in 10 think prices will rise, a decrease
from two years ago. Expectations for rising prices are highest in
the South, with Westerners likeliest to predict they will drop.
Underscoring the public's unsettled feelings, the number saying
local housing prices are about right has fallen to 35 percent. Half
say homes are overpriced - especially in the Northeast - while
those saying housing is underpriced have doubled to one in 10,
particularly Midwesterners.
Some pockets buck regional trends. Laurie Jensen, a single
mother of three, struggles to make payments on her home in
Whitehall, Mont., by working as a seasonal road construction
flagger and at times collecting unemployment. She said she'd like
to move outside of town, but the area is popular and prices have
surged.
"Things are pretty crazy," she said. "Places I don't consider
that great are really expensive."
One in 10 have adjustable rate mortgages, half of the number who
said so two years ago. These mortgages generally start at a low
interest rate and are later adjusted to market conditions - which
has often meant steep, unaffordable boosts that have forced many to
refinance or even lose their homes.
Daniel Gallego, a warehouse worker in Stockton, Calif., said he
may have to sell his home at a big loss. He said rising gasoline
and other costs have made his adjustable rate mortgage
unaffordable. Because he doesn't expect his home's value to recover
soon, he said he may be better off moving now, before his rates
rise.
"We may have to move in with my wife's parents or my parents,"
said Gallego, 30, who has two young children. "I could pay off
some debt, then we could rent, and maybe buy another house in a few
years."
The public anxiety is in reaction to an economy that is veering
toward recession and losing jobs even as the housing market
sputters badly. Foreclosures have soared to record highs, mortgage
rates have increased, sales of existing and new homes have fallen
and home values have dropped.
Gus Faucher, director of macroeconomics for Moody's Economy.com,
a consulting firm, estimated that 9 million homeowners owe more on
their home than it's worth. He said his company believes home sales
are at or near bottom and home values will continue to fall until
early next year.
Even so, he said, many people bought their homes before the
run-up in values that started around 2001 and remain in good shape.
"So the value of your house goes down temporarily," he said.
Unless the homeowner must sell now or can't afford the payments,
"that doesn't have that much of an impact."
The poll also found:
-The biggest worriers are those expecting to buy soon. Of that
group 43 percent frets that their home's value will drop in the
next two years, compared with 25 percent of those not expecting to
buy shortly.
-Fifty-nine percent think now is a good time to buy.
-Half think this is a very tough time for first-time buyers, an
increase from two years ago. Nearly two-thirds think it's harder
for first-home buyers than it was five years ago.
The AP-AOL Money & Finance poll was conducted from March
24-April 3 by Abt SRBI Inc. It involved telephone interviews with
1,002 adults nationwide, for whom the margin of sampling error is
plus or minus 3.1 percentage points.
Included were interviews with 769 homeowners, for whom the
sampling margin of error is plus or minus 3.5 points. The margin of
sampling error for other subgroups was larger.
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AP Director of Surveys Trevor Tompson and AP News Survey
Specialist Dennis Junius contributed to this report.
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