Financial, Mortgage Fallout Creating "Crisis of Confidence" Among Home Buyers

Business Wire, Oct 2, 2008

Trulia's American Dream Survey Finds 70 Percent of Non-Homeowners Have No Plans to Purchase a Home in the Next 12 Months; Nearly Half in 18-34 Age Group Say It's Too Costly to Purchase a Home in Today's Market

SAN FRANCISCO -- A national consumer survey released today by real estate search leader Trulia exposes a "crisis of confidence" among key groups of U.S. homebuyers who face an increasingly turbulent housing and financial climate.

More than 70 percent of non-homeowners surveyed say they have no plans to purchase a new home in the next year. Nearly half of respondents (44 percent) who fall in the 18-34 year old demographic--the sector thought to encompass most first-time homebuyers--confirm that the reason they do not own a home right now is because it is too cost-prohibitive. Among those aged 35-44, 41 percent of respondents polled confirm that concerns about being able to qualify for a home loan is keeping them on the sidelines of homeownership. In fact, only 12 percent of non-homeowners say they expect to buy a home in the next 12 months.

"It appears that the financial and mortgage meltdowns really have had their greatest impact on the sector of American consumers who haven't yet bought a home," said Pete Flint, CEO of Trulia, which plans to make its "American Dream" survey a recurring measurement and barometer of consumer attitudes toward buying and selling real estate.

"This combination of the mortgage and Wall Street crisis is tantamount to a one-two punch that has knocked the wind out of the American home buying public. The question is how quickly the American psyche will heal. Despite this short term pain, half of all Americans believe that home ownership is still the cornerstone of the American dream. It is the dream of homeownership that--in the end--may help the market rebound," said Flint.

Among Americans surveyed, 92 percent of homeowners and 70 percent of non-homeowners say they plan on just staying put over the next 12 months. In fact, nearly half (49%) of homeowners still believe that their home is a great long-term investment.

However, the survey does reveal some positives in the real estate sector:

* More than half of all non-homeowners said they still believe homeownership is a central point in achieving their own personal "American Dream." Women aged 35-44 in the survey agreed on this sentiment more than men aged 35-44 (66 percent versus 47 percent).

* Non-homeowners with an annual household income of $50,000 to $75,000 agreed more strongly (78 percent) on a home being central to achieving their own personal American Dream than those with an annual household income of under $49K or over $75K (51% and 53%, respectively).

* Nearly half (49%) of U.S. homeowners who responded to the survey said they still believe their home is a great long term investment. Interestingly, men (55 percent) were more likely than women (43 percent) to indicate that their home was a great long term investment.

* Some 77 percent of homeowners say they haven't taken equity from their home in the past 24 months, which offers evidence to help allay some concerns that cheap debt had led many Americans to over-invest in their homes.

* Only 4% of non-homeowners said that "Waiting for the new Housing Recovery Act to take effect" was keeping them from home ownership - suggesting that this act will likely have little effect on home purchases made by those who do not currently own their own home.

For more information, or to access the executive summary of Trulia's American Dream survey, please visit: http://info.trulia.com/index.php?s=43&item=44.

Survey Methodology

This housing study was conducted online within the United States by Harris Interactive on behalf of Trulia between September 19-23, 2008 among 2507 general population adults age 18 years or older, 1549 of whom were homeowners and 958 who were not. Results were weighted as needed for age, sex, race/ethnicity, education, region and household income. Propensity score weighting was also used to adjust for respondents' propensity to be online. The survey series will become a benchmark in measuring sentiment and confidence among both homeowner and non-homeowner households in the U.S.

About Trulia, Inc.

Trulia, Inc., a residential real estate search engine and the fastest-growing U.S. real estate Web site (comScore), has revolutionized online home search by offering a rich, intuitive user experience that points consumers directly to listings on agent and broker Web sites. By partnering with the real estate industry, including 93 of the top 100 largest U.S. brokers, Trulia helps approximately 4.5 million unique visitors per month find information on homes for sale using custom search criteria. The site also provides market trends and neighborhood data at the hyper-local level, as well as Trulia Voices, a real estate Q&A community, that enables consumers and professionals to exchange information about their local markets. For more information, visit http://www.trulia.com/.> About Harris Interactive