ONE IN FIVE AMERICANS PLAN TO BUY A HOME DESPITE ECONOMIC CONDITIONS

First Time Buyers Optimistic, Homeowners Search for Solutions to Stay in Homes

 LOS ANGELES -- (March 23, 2009) – While half (52%) of all Americans are concerned they or someone they know will face foreclosure in the next six to 12 months, 23% of adults plan to purchase a home in the next five years, and more than half of them (53.5%) are first time homebuyers, according to a new survey commissioned by Move, Inc., the leader in online real estate and operator of Realtor.com®, the #1 homes for sale Web site.

 The Move survey also found nearly one out of five homeowners (18.9%) plan to take advantage of the administration’s new program to help prevent foreclosures.  While searching for answers in the past 12 months, 21% of all homeowners with a mortgage contacted a lender to restructure their loan.  Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer.

 Unemployment is a driving factor causing many Americans to fear foreclosure, according to the survey.  More than a quarter (27.1%) of adults feel they or someone they know may default on their mortgage due to recent unemployment (27.1%), future unemployment (29.3%) or because they owe more on their home than it’s worth (25.6%).  One out of eight (15.4%) is having a hard time making mortgage payments because they’ve recently increased or because they have too much debt (18.8%).

 Determined to remain in their homes, nearly three-quarters (72%) of adults reduced spending in the past year in order to make monthly mortgage or rent payments, mostly by cutting discretionary spending such as vacations, entertainment and eating out (75%), personal items such as clothing, personal care and personal luxuries (72%) and energy costs such as gasoline and utilities (71.6%).  Regardless of age, most Americans are cutting spending back from some aspect of their life to pay housing costs.

 Despite today’s challenging market conditions, 18.1% of adults plan to buy a home this year in order to take advantage of the $8,000 tax credit recently passed by Congress in the administration’s economic stimulus package.

 “It’s not all doom and gloom.  We found Americans are optimistic about homeownership despite concerns,” said Move, Inc., CEO Steve Berkowitz.  “They’re doing everything they can, from reducing discretionary spending to pay their mortgages, to planning to take advantage of the administration’s new program to stop foreclosures.  They’re also working with lenders to modify loans.  Even more impactful are numbers that show interest in home ownership is strong as nearly a quarter of all adults plan to buy a home in the next five years.”

 Pent-Up Demand Increasing

The Move survey found the housing downturn, now entering its third year, has created significant demand for homeownership especially among first-time homebuyers.  While 5.8% plan to purchase a home in the next 12 months, 12.8% of Americans say they plan to buy a home in the next two years and 11% plan to purchase a home in two to five years.

 Over half of those planning to buy in 2009 are first-time homebuyers (53.5%).  By comparison, 41% of homebuyers in 2008 were first-time homebuyers, according to the National Association of Realtors^[1] .

 While 18.1% of homebuyers do plan to buy this year to take advantage of the $8,000 tax credit, nearly half (47.6%) said they didn’t know about the credit and 29.3% said it wasn’t large enough for them to act right now. Potential homebuyers with higher incomes are more interested in the tax credit than those in lower income brackets, as 43.4% of first-time buyers earning $50,000 or more say they plan to use the tax credit.

 Potential buyers are watching real estate prices more closely today than 12 months ago.  Half of all Americans (49.6%) are paying more attention to home values today than they were a year ago, especially those aged 25 to 34 (61.9%).  The median age of first-time homebuyers is 30 years old^[1].

 “Having the wealth of information on home values available on Realtor.com makes it easy for potential buyers to research and plan their real estate purchase as they begin their search.  In fact, the average buyer researches properties online for 10 months^[1] before contacting a Realtor®.  So quick and convenient access to information is critical, especially in today’s highly competitive environment,” said Errol Samuelson, president of Realtor.com.

 "If you're basing a real estate decision on old or out-of-date information, you risk making a poor decision with potentially significant financial consequences," explains Samuelson. "Providing current and detailed information drawn directly from a local MLS, in conjunction with our 15-minute update program, educates buyers and sellers on market conditions and results in more productive conversations with Realtors.”  

 Changing Views of Homeownership

The Move survey uncovered changing attitudes towards owning a home.  About two-thirds (62.5%) now consider their home primarily a place to live as opposed to an investment.  Adults earning up to $20,000 and between $30,000 and $39,900 annually are significantly more likely to feel most strongly that a home is more of a place to live than an investment as compared to those earning $50,000 or more.

 In light of the fact that homes are more affordable today, Americans said that if they could purchase more home for their dollar, bigger is definitely better.  Survey results found today’s homeowners value more space by a slight margin (10%) over a list of other options, including, energy saving features (6.8%), bigger or nicer yard (6.1%), a better location (4.2%) or updated amenities (3.4%).