Survey: Homeowners see homes as ‘solid’ investment
(San Francisco - October 30, 2006 6:27am)
Homeowners see their homes as a sound financial investment and want to make improvements, according to a survey commissioned by Wells Fargo & Co. (NYSE: WFC) of San Francisco.
A majority (72 percent) says that the equity in their home is their most important investment, according to the survey, which was conducted in August. Among homeowners who have a home equity loan or line of credit more (82 percent) say their home equity is most important.
When asked to select the most important benefit in owning a home from several options, the top choices were that it provides a sense of security (25 percent) and it is a great investment (24 percent). Women were more likely than men, by a 3-to-2 ratio, to view the most important benefit as security, while men were more likely than women, by a 3-to-2 ratio, to see their home as an investment, Wells Fargo says.
Younger homeowners ("Generation Y," defined as ages 18-29) are more inclined than the older generations ("Baby Boomers," ages 42-60, and "War Babies," ages 61 and over) to view real estate as an important investment option in their financial portfolios (44 percent vs. 32 percent), the bank says.
Despite the recent general slowdown in housing prices, the survey found that 90 percent of homeowners expect their own home value to stay the same (27 percent) or increase (63 percent) during the next 12 months. A large majority (80 percent) is satisfied with their home purchase, indicating they would likely purchase their current home again. Additionally, the majority (54 percent) said they like their current home and would make improvements.
"This survey finding suggests that homeowners are seeing the conditions of their local housing markets and concluding that it is more likely that price declines will be moderate not steep," says Doreen Woo Ho, president of Wells Fargo's Consumer Credit Group, in written comments.
"There is a divergence of opinion among housing market experts today on how much prices might adjust. This survey data gives credence to those who hold the view that we're more likely to have stability over time,” she says.
The Wells Fargo survey of U.S. Homeowners, conducted by market research firm ICR of Media, Pa., and commissioned by the Wells Fargo Consumer Credit Group, polled 1,361 homeowners. Respondents were targeted to closely mirror the U.S. homeowner population by gender, age, region, race and education.
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