Americans Increasingly Pessimistic About Housing Market Recovery
It seems that conflicting reports about the state of the United States economy are released on a near-daily basis, with claims that the recession is over, that it will continue to get worse, and everything in between. With so much competing information, many Americans do not know what to believe. According to a recently released survey, however, many Americans have made up their minds despite whatever information is reported. Approximately half of homeowners in Georgia and across the country stated that they would walk away from a mortgage on which they owed more than their home’s worth, which would lead to foreclosure and, for many, an inevitable new start.
The survey, which questioned 2,000 Americans about their opinions of the housing market and economy, was conducted by RealtyTrac, Inc., and Trulia, Inc., two real estate website companies. Approximately 48 percent of respondents would consider defaulting on their mortgage if they were under water. In a similar survey in May, only about 40 percent of respondents gave the same answer.
According to Rick Sharga, the Senior Vice President of RealtyTrac, Inc., families used to be more willing to stay in their homes and fight foreclosure despite the disparity in value. However, that may no longer be the case. “Every survey that I’ve seen suggests the further you are upside down, the more it becomes an economic decision,” he said. “And people do tend to vote in the best interest of their family economics.”
In general, the survey reported, Americans have lost faith in the housing market, with a majority of respondents stating that they do not expect any sort of recovery until at least 2010. Twenty percent believe recovery will not happen until at least 2015. And 44 percent reported a loss of faith in mortgage companies following recent reports of lender misconduct.
Sharga says this loss of faith does not bode well for foreclosure numbers in the next few years. “That sort of relationship with the lending institution is causing a lot of people to say, ‘You know what? The heck with it. I’m going to mail them the keys and make it their problem,” he said.
Source: The Grand Rapids Press, “Growing number of homeowners would consider walking away from under water mortgages“, Cami Reister, 7 December 2010