Even though the housing market is still suffering from the effects of the worst housing market downturn since the Great Depression and many owners have seen the monetary value of their home decline, Americans still emphatically believe in homeownership.
That's the key finding of a recent nationwide survey of people likely to vote conducted on behalf of the National Association of Home Builders (NAHB) by the Republican and Democratic polling firms of Public Opinion Strategies and Lake Research Partners.
Three out of four voters say that owning a home is worth the fluctuations in the market and the best long-term investment they can make, while 73 percent of those who do not own a home say it is a goal of theirs to eventually buy one.
Further, 80 percent of current home owners would advise a close friend or family member just starting out to buy a home. This is true even among those who are underwater on their mortgages.
Those are solid votes of confidence in an ideal that has suffered disproportionately due to the recession. Yet, like many other industries, housing is cyclical. With the worst of the downturn behind us, NAHB is forecasting that national home prices will remain flat this year and show modest growth in 2012.
To argue that home values will continue to decline and never recover, somebody has to make a convincing case that it will cost less to build a new home five years from now than it does today. That's not going to happen. Despite today's housing slowdown, the price of bricks, mortar, lumber, copper and other products used in home building continues to go up due to worldwide demand and upward pressure on commodity prices generally.
One byproduct of the current housing slowdown is that new home production has fallen drastically. As of May 2011, U.S. single-family housing starts were running at an annual level of 419,000 units, well below the long-run trend of 1.5 million new single-family homes that are necessary to accommodate population growth and replacement of older housing stock.
As inventories wind down, demand will rise and so will prices. Over time, all these factors will help drive up the cost of housing.
Once we turn the corner on the housing downturn, the longer term housing outlook is promising.
Based purely on population growth and demographics, the U.S. will need 17 million additional homes over the next decade.
Naysayers who are looking at the demise of housing, need only to study the results of this survey (details available at www.nahb.org/voterpoll http://www.nahb.org/voterpoll ). An overwhelming 95 percent of home owners say they are happy with their decision to own a home and Americans believe that homeownership is the single best investment for middle class families and helps provide for their retirement and their children's education.
Further, nearly three out of four voters believe that the federal government should provide tax incentives to promote homeownership, a sentiment that cuts across partisan and regional lines across the country. In addition, a resounding majority oppose eliminating the mortgage interest deduction and would be less likely to support a candidate for Congress who wants to do away with it.
The bottom line: American voters may be divided by partisanship, political ideology and on a number of issues, but there is a strong bipartisan consensus that owning a home is still very much a part of the American Dream. As lawmakers debate housing finance and tax issues that could affect every household across the land, they would be well-served to heed the wishes of the American electorate. Otherwise, they could be in for a rude surprise next November.
Deb Kleckner, Secretary EO
Carbon Builders Association