RICHMOND, Va. – June 13, 2011 – A new global survey suggests that homebuyers around the world are poised to buy a home, but property market instability and worries about their personal finances holds them back.
The International Mortgage Trends Report, commissioned by Genworth Financial and conducted by independent research firm RFI, is a new global survey of current and aspiring homebuyers aimed at gaining local insight into key world markets. RFI interviewed more than 9,000 respondents across five continents in eight countries: Australia, Canada, India, Ireland, Italy, Mexico, the United Kingdom and the United States.
“We hope the findings in this report help to encourage a deeper understanding of the challenges that are likely to shape business strategies in the near to medium term, as well as … help identify future opportunities for business growth,” says Kevin D. Schneider, president of U.S. mortgage insurance for Genworth Financial.
Consumer confidence is one of the most important factors influencing a decision to buy a home. Survey responses indicated that concerns about the rising cost of living, property market instability and the impact of government-led austerity measures have eroded homebuyer confidence in some countries, and have led consumers to adopt a wait-and-see attitude. Survey respondents in the United Kingdom, for example, say they will not actively enter the housing market this year.
Some other key findings:
• Consumers in many countries are more concerned about personal finances than their nation’s economies. While countries with somewhat less developed economies tend to be more optimistic about their respective nation’s finances than countries with more established economies, those concerns were secondary to survey respondents’ fears about their own financial affairs.
• Comfort with indebtedness colors how households around the world view their financial situation, as well as their approach to buying a home. Borrowers in India and Mexico stay out of debt by accumulating savings while living with parents and grandparents. People surveyed in those countries tend to be more concerned about housing affordability. Survey respondents in the U.S., U.K., Ireland, Canada and Australia are more apt to be comfortable with higher levels of debt. Respondents from those nations are less concerned with housing affordability than the impact of rising utility costs and gasoline prices.
• Despite worries over personal finances, survey respondents in many countries saw clear opportunities in the property market for those who could afford to buy.
• There was widespread support of mortgage insurance for all types of property buyers including investors and repeat homebuyers. Consumers around the world appear to have an increased awareness and understanding of the value mortgage insurance provides in helping them purchase a home sooner with a lower downpayment.
Key country findings
Canada: Canadian borrowers are generally comfortable with high levels of debt, and nearly half of all Canadian respondents were positive about the outlook for their economy and housing market.
India: Indian homebuyers are generally upbeat about the economy and their personal finances and believe a combination of mortgage insurance and product innovation could help new property buyers get into the market sooner.
Italy: Homebuyer confidence in Italy remains weak; just over half of survey respondents were worried about their national economy. Concerns about personal finances have prompted two thirds of those who would ideally like to buy property now to conclude they are not in the financial position to do so.
Australia: Indebtedness is rising in Australia and with it, increasing concerns about personal finances and housing affordability. Despite that, the vast majority of Australian homeowners had no trouble meeting their mortgage payments in the last year and nearly half overpay their mortgage.
Mexico: Worries about future unemployment and personal security have contributed to Mexican survey respondents’ less positive attitude toward their property market. A housing shortage in Mexico is also having a negative impact on affordability.
United Kingdom: U.K. respondents are more optimistic on average about the property market, but worries about their national economy and personal finances will likely keep homebuyers from entering the property market this year.
United States: Nearly two-thirds of Americans surveyed believe now is a good time to buy a home and think mortgage insurance is a good way to help them to do it. However, that optimism is tempered by concerns about how the U.S. economy will perform in the next year and the impact of falling home prices on Americans’ personal finances.
Due to affordability issues – high home prices, higher costs of living or fear of rising interest rates – the average age of first-time homebuyers has risen in all countries except India over the last 40 years. The average age at which a person in the U.S. was able to purchase a first home rose from 27.3 in the 1970s to 31.6 in the 2000s.
© 2011 Florida Realtors®
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