Homeowners Stay Put as Financial Uncertainties Bite

Home sales have gotten off to a rocky start this year, despite momentum coming out of 2013 and the lowest mortgage interest rates in 11 months. What’s causing this stagnation?

According to a new study from RateWatch, around a quarter of potential homebuyers simply do not feel financially stable enough to commit to a home purchase.

For instance, 81% of current homeowners responding to a recent RateWatch survey said they had no plans to purchase a different home any time soon.

Among non-homeowners, financial instability was the #1 reason for not buying a home. And this anxiety was seen across income brackets, according to RateWatch.

In the survey, 32% of non-home owning respondents with an annual household income between $25,000 and $49,999 said that money worries were keeping them from considering a home purchase. This isn’t particularly surprising, considering that Americans in this income bracket have suffered from years of financial uncertainty, poor access to credit and rising prices.

However, RateWatch said that an even bigger percentage (38%) of non-homeowners with an annual HHI between $100,000 and $149,999 also felt too financially uneasy to consider a home purchase.

Additionally, a full 24% of non-homeowners with an annual household income of more than $150,000 felt this way.

Clearly, there’s a high level of financial anxiety at weighing on Americans this year, and it’s having an effect on current home sales. Perhaps the improving economy seen in the 1st quarter data – particularly on jobs and consumer confidence — will help to ease that anxiety, and spur some additional home buying this summer.

 

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