Home ownership remains part of the American dream, even for younger adults. This may help drive a recovery of the housing markets, which many analysts believe cannot be sustained long term.
Data from a variety of public and private sources show that most of the factors for a strong housing recovery are in place. Foreclosures have started to fall. Home prices have risen year over year in many large markets. Most home builders have become more optimistic. Raw home sales numbers are higher. And the worst-hit markets in terms of sale prices are among those that have recovered best, which means many underwater mortgages are underwater no longer.
Doubts about the sustainability of the recovery are founded on the trends of people who want to rent residences rather than buy them, a shaky recovery of employment and gross domestic product, as well as the belief that home inventories will balloon sharply as more houses are put on the market as prices recover and people can make a profit. That inventory increase eventually will put prices back into a downward spiral, this theory says.
However, the factor that may tip home sales and prices higher is the simple desire of Americans to own their own homes. Based on new Gallup data on home ownership in the United States:
Americans’ dream of owning a home is alive and well, evidenced by the fact that most Americans own a home and plan to continue to do so (56%), or don’t own a home but plan on buying one in the next 10 years (25%).
Nearly 7 in 10 Americans aged 18 to 29 currently do not own a home, but plan on buying one within the next 10 years. Coupling this with the 21% of younger Americans who say they already are homeowners leaves few adults under 30 who say they don’t own a home and have no plans on buying one.
Spread across the number of individuals in each of the Gallup categories, tens of millions of people own or want to own homes. And the trend apparently will last for years.
Often there is a barely hidden source of demand that makes a part of the economy more successful than forecast. The auto industry is an example, in fact. Unit sales over the past two years have been higher than most experts expected. But people were drawn by low interest rates, and the fact that the cars they have owned are, on average, many years older than in the past. A portion of the recovery is, therefore, based on replacement. Beyond that, many Americans may just want to own a new car.
Housing’s future could be better than expected because of a long-term desire of Americans to have their own homes.
Methodology: Results for this Gallup poll are based on telephone interviews conducted April 4 to 14, 2013, with a random sample of 2,017 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.