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Survey: Financial Instability Top Reason Why People Aren't Buying Homes

New survey data takes a look at how consumers are thinking about home buying, whether theyre looking to buy their first property or turnaround their current home...

New survey data takes a look at how consumers are thinking about home buying, 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.

According to the survey from RateWatch, “Home Lending: Today's Customer,” a lot of people are happy in their current homes and the majority of those that don't own are not looking to buy a home due to their current financial situation. Here are some interesting survey results:

• 81 percent of current homeowners have no plans at this time to purchase a different home.
• Non-homeowners 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," reported Debra Borchardt, Markets Analyst for TheStreet, owner of RateWatch, a banking data and analytics service. "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 home buying 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 home-buying process, women are more likely to look up their credit score first, contact a REALTOR®, and 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®.

When beginning the home-buying process, women are more likely to look up their credit score first, contact a REALTOR®, and 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®.

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 home-buying process, women are more likely to look up their credit score first, contact a REALTOR®, and 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 5 percent was the most common maximum interest rate that respondents would be willing to pay on a 30-year, fixed-rate mortgage.

SOURCE: TheStreet, Inc.
Reprinted with permission from RISMedia. ©2014. All rights reserved.

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