Millennials Optimistic About Housing Market (INFOGRAPHIC)

Despite signs of continued housing market distress, most homeowners and perspective buyers are optimistic about the housing market, according to a survey by real estate website Trulia. (Scroll down for a graphic.)

In the biannual American Dream Survey, 78 percent of homeowners said their property was the best investment they had ever made. But 20 percent said they felt trapped in a home that was worth more than their mortgage, and 14 percent told surveyors that they would walk away from their homes if they could.

The people least likely to be affected by the housing crisis, 18 to 34-year-olds referred to as 'millennials,' were most optimistic about a recovery. According to Trulia, 26 percent had become more positive about owning a home over the past six months compared to 18 percent of 35 to 44 year-olds and 45 to 54 year-olds, and 22 percent of baby boomers.

"The American nightmare is over, I truly believe the worst is behind us" said Trulia CEO Pete Flint during a conference call. "But in 2011, foreclosures will continue to be a roadblock in the road to recovery," said Flint, adding that he expected the market to "bounce along the bottom" for another 12 to 18 months.

Millennials were also more likely to aspire to own homes, with 88 percent of the 18 to 34-year-olds surveyed saying they planned to buy property. Flint argued that this demographic would be key to reviving the real estate market.

The South and West regions were filled with the most prospective homebuyers, with 79 percent of renters in the South and 70 percent of renters in the West planning to buy homes, a possible boost for the regions hardest-hit in the housing crisis.

But, mortgage lending was the tightest it has been in recent times. "Credit is a key driver in whether people can afford to buy homes," said real estate appraiser Jonathan Miller during the same conference call. And with more than 90 percent of mortgages floating through government sponsored enterprises like Fannie Mae and Freddie Mac, an eagerly awaited announcement about mortgage market reforms will be key to defining the shape of a recovery, he added.

The responses are from an online survey of over 1,300 homeowners and around 700 renters taken between the January 20 and January 24 on behalf of Trulia.com.

Comments

[Scott Connery]

06:55 PM on 02/11/2011

27% of Americans are underwater in their houses. We can't fix the housing market until this is resolved.

http://www.rationalpublicradio.com/27-of-home-mortgages-are-underwater.html

[pompous]

05:31 PM on 02/10/2011

The thing we should all appreciate in this is simply youth. Youth being the time of your life that real life hasn't yet touched. Real life being getting a job, paying your own bills, not asking Mom and Dad for monetary assistance (i.e. down payment or loans), living within your means and living with the real possibility that no matter how special your parent's and honor roll status made you feel you are just another number in the human resources department and are expendable at any given time. Enjoy your optimism.

[DanielRLevitan]

11:18 AM on 02/10/2011

And they should be optimistic. A recent FNMA survey found the very same thing - people are ready to forget the past and look to the future regarding housing and homeownership is an integral part of our national psyche (although we pushed the ownership rate a little high in the past few years).

The housing markets are already starting to recover and with interest rates still very low by historical standards (look back to the 1960s and 1970s) and prices at their lowest levels in six years, now is the perfect time to buy and, while I am sure this will induce many comments, housing today is truly an excellent investment.

http://www.residentialmarketingblog.com/

[Carolab]

02:36 AM on 02/10/2011

Trulia is saying it's less expensive to buy than rent right now, which is TRUE (my husband both sells and rents properties).  HOWEVER, the problem is that people don't have the money down and their credit rating is too low to buy.  They are even having trouble qualifying to rent because of their economic problems.

[NessEliot1932]

02:40 AM on 02/10/2011

What is the % down required now?

And what credit score is considered excellent?

[Carolab]

02:48 AM on 02/10/2011

You can get FHA loans for 3.5% down with less than perfect credit.  Most lenders require at least a 730 FICO score and 20% down.

Those unable to fulfill either or both requirements may still qualify for an FHA loan.

Read more: http://www.brighthub.com/money/personal-finance/articles/25177.aspx#ixzz1DXXLzoip

As of September 2010

Minimum credit score requirements for FHA home loans depend on which FHA loan product the applicant needs. Generally speaking, to get maximum financing on typical new home purchases, applicants should have a credit score of 580 or better. Those with credit scores between 500 and 579 are, according the the FHA guidelines, "limited to 90 percent LTV".

Applicants who have a minimum decision credit score of less than 500 are not eligible for FHA mortgages. Those with credit scores of 500 or better are eligible for 100% FHA loan financing with no down payment required when using the FHA 203(h), Mortgage Insurance for Disaster Victims.

The FHA does make allowances for loan applicants with a "non-traditional credit history or insufficient credit" may be able to be approved for an FHA loan if they meet FHA requirements for such circumstances.

http://www.fha.com/fha_article.cfm?id=200

[Carolab]

01:52 AM on 02/10/2011

The 40% who have lost faith (those 45 plus years old) are those who have seen the equity in their homes fall after years of saving and moving up to another home or two.

They see nothing to rejoice in when they go to sell and find their equity has vanished including money put into sizable down payments and improvements paid for with profits from their previous home(s).

[PhilipTaylor]

01:59 AM on 02/10/2011

They have seen unpunished crimes against HUMANITY!

[Carolab]

02:03 AM on 02/10/2011

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[Carolab]

02:04 AM on 02/10/2011

AARrrGHH

What I posted was that the bankers and youth want the Boomers to move out of the way because they want to make money on OUR houses and kick us to the curb without social security or medicare.

[Carolab]

02:33 AM on 02/10/2011

The only people in that age group who are optimistic are those with enough capital to buy up depressed properties in order to rent them out and then spin them later when the market is better.

[Aristofaness]

12:25 AM on 02/10/2011

I am very optimistic about the future! Houses are going to have their real value!, actual values are not low enough.

[Carolab]

02:29 AM on 02/10/2011

Obviously you are very young.

[Aristofaness]

05:38 PM on 02/15/2011

Obviously you are a baby, lol

[brandonslayton]

12:10 AM on 02/10/2011

'Millennials'??? what happened yo Generation Y?

[brandonslayton]

12:10 AM on 02/10/2011

to*

[Carolab]

02:31 AM on 02/10/2011

Y is alternately called the Millenial Generation.

[thebearschick]

11:58 PM on 02/09/2011

As someone who would like to purchase a home in the next 2 years, I couldn't be more gleeful to see the way prices keep getting slashed. And yeah, I'm under 30.

[liberalbug]

09:35 PM on 02/09/2011

It's easy to be optimistic about the future when you have graduated college, are living with your parents again, they do your laundry and cook for you, and you can spend your days with your I-pad looking at funny videos at the local coffee shop after your shift at the local coffee shop.

[Arts4u]

07:48 PM on 02/09/2011

With the need for increased mobility in terms of maintaining one's career - ie. the last ten years required people to move more in order to find work and average length of time with individual employers has declined to two years, I imagine it will not be wise to invest in anything as long term as home-ownership.

[Mr Hankey]

04:03 PM on 02/09/2011

Sure - investors may be optimistic.

[SF TKF]

03:44 PM on 02/09/2011

People under 40 (at least where I live) had mostly accepted that they would never own a home. We could all see that the market was nuts and that it had to end eventually, but people who supposedly knew more than us maintained that we were wrong . . . Well, a few years later the bubble has burst and for the first time in our lives we see a path to homeownership (which we still see as desirable, given the tax breaks and the extreme restrictions that landlords often impose on rental units). More than half my friends have bought houses in the past two years and the rest are looking. My mortgage is $400 less a month than my cheap rental was, so even after I pay insurance and property taxes, I’m coming out about even. With the tax write-off for interest, I’ll be way ahead.

[Shaun Hensley]

04:32 PM on 02/09/2011

I hope it happens to you too. Which it will, because RE is still not in line with incomes.