Survey Shows Opposition to Down Payment Requirements and Elimination of Mortgage Interest Deduction
NAR’s ninth housing pulse survey reflects that, as the housing market continues to struggle, Americans worry that policy proposals coming out of Washington could drag the market down further or deter potential new homeowners.
There is particular concern surrounding calls for a required down payment of 20 percent on home purchases. Seven-in-ten Americans say requiring a down payment of 20 percent on the cost of a home would have a negative impact on the housing market. The survey also shows strong concern about the possible elimination of the home mortgage interest deduction. Two in every three Americans, 67 precent, oppose eliminating the home mortgage interest deduction as part of a plan to reduce the federal deficit. A majority of Americans (51 percent) strongly oppose eliminating it. Americans believe that either action would have severe consequences for the housing market.
The survey, which measures how affordable housing issues affect consumers, also found job security concerns remain high, with 61 percent of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to homeownership.
The telephone survey of 1,250 adults nationwide, with an oversample of 250 interviews in the top 25 metropolitan statistical areas was conducted for NAR by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program.
Some key findings from this year’s survey include:
- Seven-in-ten Americans (71 percent) say requiring a down payment of twenty percent on the cost of a home would have a negative impact on the overall American housing market.
- More than three quarters of renters (77 percent) say they would be less likely to buy a new home if they were required to make a 20 percent down payment. Among current homeowners, four-in-ten (39 percent) say they would not have been able to buy their current home if they been required to make a 20 percent down payment.
- Having enough money for a down payment and closing costs is the largest obstacle that makes housing too expensive and unaffordable (82 percent say it is a “huge” or “medium-size” obstacle).
- Two in every three Americans (67 percent) oppose eliminating the home mortgage interest deduction as one part of a plan to reduce the federal deficit. Underscoring the intensity of this opinion, a majority of Americans (51 percent) strongly oppose eliminating it.
- Even more Americans (73 percent) believe that eliminating the home mortgage deduction would have a negative impact on the American housing market, while 65 percent say it would have a negative impact on the overall economy.
- While fewer Americans than in the past agree, the overwhelming majority (72 percent) still say that buying a home is a good financial decision. Almost two–thirds (64 percent) say that now is a good time to buy a home.
- The stalled economy continues to adversely affect the housing market. Confidence in job security is a top obstacle (80 percent say “huge” or “medium-size”) to home ownership, while job layoffs and unemployment are ranked as the top problem facing Americans (61 percent say it is a “very big” or “fairly big” problem in their area).
- Foreclosures on homes remain a large concern, with almost half (47 percent) characterizing the issue as either a “very big” or “fairly big” problem in their area.
- Stability, safety and the long-term economic benefits of ownership top the list of reasons people give for why it is important to own a home.