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Financial Instability Tops Among Non-Homeowners' Obstacles

May 29, 2014

RateWatch, a banking data and analytics service owned by TheStreet Inc., has released the results from of a survey titled, Home Lending: Today’s Customer. The data shows how consumers are thinking about homebuying, whether they’re looking to buy their first property or turnaround their current home, what their priorities are in finding a home and a lender and what interest rates they expect to pay. The survey found that a lot of people are happy in their current homes and the majority of those that don’t currently own are not looking to buy a home and their current finances are why: ►81 percent of current homeowners have no plans at this time to purchase a different home. Non-home owners consistently listed financial instability as a contributing factor for not buying a home regardless of their household income (HHI): ►24 percent with an annual HHI over $150,000 ►38 percent with an annual HHI between $100,000 and $149,999 ►28 percent with an annual HHI between $50,000 and $99,999 ►32 percent with an annual HHI between $25,000 and $49,999 ►31 percent with an annual HHI between $0 and $24,999 “Interestingly, the survey found that a quarter of potential homebuyers just don’t feel financially stable enough to commit to a house and it didn’t matter how much money they made,” said Debra Borchardt, markets analyst for TheStreet. “It’s understandable that someone making less than $25,000 a year doesn’t feel like they can afford a home, but it’s shocking that someone who makes over $150,000 a year feels equally poor. Higher home prices could be a good reason why with homes hitting record high prices and inventories hitting a low.” The survey also revealed differences between how men and women handle their loans, financing, and homebuying process: ►Men are more likely than women to have their current home paid off, with 31 percent of men carrying no loan on their home and only 21 percent of women carrying no loan on their home. ►Men are significantly more likely than women to be aware of refinancing options, but not take advantage of them, with 47 percent of men choosing not to refinance versus only 35 percent of women. ►When beginning the homebuying process, women are more likely to look up their credit score first, contact a realtor, then find a house they would like to buy, whereas men are more likely to find a house they would like to purchase, search for rates, and then contact a realtor. The survey found that interest rates were extremely important to consumers: ►When selecting a lender, respondents said that the most important factor was rate, followed by monthly payment amount and term length. The type of institution (bank vs. credit union) was least important. ►Four percent to less than five percent was the most common maximum interest rate that respondents would be willing to pay on a 30 year fixed rate mortgage.
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