Which demographic do you focus your FARMing campaigns on?
- Negative-equity owners. (29%, 15 Votes)
- Homeowner occupants. (27%, 14 Votes)
- Renters. (17%, 9 Votes)
- Absentee owners. (13%, 7 Votes)
- Positive-equity owners. (13%, 7 Votes)
Total Voters: 52
Fannie Mae’s recently released 2011 National Housing Survey asked homeowners and renters about their future plans to either own or rent the next time they moved.
Demographic lifestyle shifts played a key role for the free and clear homeowners, i.e. retirees or prospective retirees, who mostly said they would buy. Mortgaged homeowners’ and renters’ attitudes about their future housing were more heavily influenced by the ability to take out a home loan and whether owning or renting saved them more money.
Three demographic groups were surveyed on whether they would buy in their next move. They said yes as follows:
- 42% of renters, up from 40% who expressed they would buy in the 2010 National Housing Survey;
- 72% of free and clear homeowners, up from 70% in 2010; and
- 80% of homeowners with a mortgage, up from 78% in 2010.
Exposure to defaults, negative equity and a generally negative perception of the housing market did not factor into future decisions to own vs. rent.
The largest demographic who claimed they would buy again – homeowners with a mortgage – cited the financial benefits of homeownership and the idea that homeownership is an integral part of the American Dream.
first tuesday insight
California has always been less susceptible to the pull of the American Dream, as homeownership rates have been consistently lower than national homeownership levels. Nationally, the historic homeownership rate hovers around 65%, the current level. In California, the highest homeownership rate experienced was just under 61% in 2006; currently just over 54% and dropping steadily.
Obviously, on their next move Californians will not get anywhere close to the percentages reported in the national survey, since that would drive homeownership rates into the 70 percentile in short order. In fact, California’s homeownership rate will likely continue to decline over the next five years, probably hitting bottom at around 51%.
Still, buyers are out there in the form of present day tenants, and smart agents will find those who would like to become homeowners. Since the American Dream has become a questionable concept for roughly half of California households, consider demonstrating the savings to be had in homeownership versus renting. Financial motivation can go far, if agents are willing to do the math of today’s prices and mortgage rates for clients.
Agents: keep these statistics in mind when FARMing for new buyer-clients – existing homeowners who sell will most likely buy again. Better yet,almost half of renters claim they would like to buy a home on their next move, and a goodly portion of them will if asked to do so.
Re: What Drives Consumers’ Intentions to Own or Rent? from Fannie Mae