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Half of Americans Uneasy About the Economy While 75 Percent Feel It's a Good Time to Purchase
Americans are more optimistic about their homebuying prospects than residents of other countries, with nearly two-thirds of Americans saying that now is a good time to buy a home, according to the new Genworth International Mortgage Trends Report. The local economic outlook, concerns about property affordability and worries about future unemployment are among the issues listed by survey respondents as obstacles to their purchasing a home.
Yet these economic concerns have not translated into excessive mortgage stress among U.S. homebuyers. According to the survey, 87 percent of Americans who bought their first home in the past 12 months expected to easily meet their mortgage repayment obligations in the coming year, a slight improvement over the 85 percent who comfortably met their mortgage payments in the 12 months prior to the survey period.
The Genworth International Mortgage Trends Report, commissioned by Genworth and conducted by independent research firm RFI, is a global survey of current and aspiring homebuyers aimed at gaining local insight into key world markets. More than 9,000 respondents were interviewed from Australia, Canada, India, Ireland, Italy, Mexico, the United Kingdom and the United States.
Due to affordability issues—high home prices, higher costs of living, or fear of rising interest rates—the average age of first-time homebuyers has risen in all countries except India over the last 40 years. The average age at which a person in the U.S. was able to purchase a first home rose from 27.3 in the 1970s to 31.6 in the 2000s.
One aspect of the homebuying process that appears to be universally recognized as a benefit in countering this trend is private mortgage insurance (PMI). In the U.S., 88 percent of survey respondents said MI helps them buy a home with a smaller downpayment. And 60 percent of Americans said private MI helps them buy a home sooner.
"The U.S. is the most optimistic among all the markets surveyed about buying a home," said Kevin Schneider, Genworth U.S. Mortgage Insurance president. "Nearly two-thirds of Americans surveyed believe now is a good time to buy a home, and a majority believe mortgage insurance can help them purchase a home sooner and with a lower down payment. We hope that federal and state lawmakers recognize this pent-up demand and enact policies that foster prudent homeownership. Regulators should develop a qualified residential mortgage rule that will strengthen underwriting standards without denying the dream of homeownership to creditworthy Americans."
Highlights from the U.S. survey respondents:
►More than 50 percent of Americans surveyed are nervous about how the economy will perform in the coming year.
►Nearly 75 percent of U.S. respondents feel that now is a good time to buy a home.
►Two thirds of American respondents feel that mortgage insurance helps them buy a home with a smaller down payment, and sooner.
►The average age at which a borrower is able to purchase their first home has increased from 27.3 years during the 1970s to 31.6 years in the 2000s.
Highlights from survey respondents in the United Kingdom:
►UK homebuyers interviewed are pessimistic over the economy and their personal financial situation.
►Despite being more optimistic than average in regards to the property market, UK respondents will not actively enter the market in the next 12 months
►FHB respondents in the UK are increasingly being priced out of the market
►Eight in 10 UK respondents expected no difficulty meeting their repayments over the coming year.
Highlights from respondents in the Canadian market:
►Nearly 50 percent of all Canadian respondents were positive about the outlook for the economy and housing market.
►Canadian respondents are generally comfortable with higher levels of debt
►Government supports the availability of credit through its operation of the Canada Mortgage Bonds (CMB) program and other government-backed securitisation vehicles.
"As the world's only global mortgage insurer we thought it important to use our expertise to examine global market forces influencing the decision to purchase a home," said Michael D. Fraizer, Genworth Financial's CEO. "We hope the findings in this report provide the mortgage industry in all markets with insights that help identify future opportunities for business growth as well as a deeper understanding of the challenges that are likely to shape business strategies in the near to medium term."
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