New Mortgage Rules Keep Renters From Homeownership
Renters Face 9-14 Year Delay in Buying Home
Most Americans still believe that owning a home is a solid financial decision, and a majority of renters aspire to home ownership as a long-term goal.
According to the 2011 National Housing Pulse Survey just released by the National Association of Realtors, 72 percent of renters surveyed said owning a home is a top priority for their future, up from 63 percent in 2010.
Seven in 10 Americans also agreed that buying a home is a good financial decision while almost two-thirds said now is a good time to purchase a home. However, the annual survey, which measures how affordable housing issues affect consumers, also found that more than three quarters of renters (77 percent) said they would be less likely to buy a home if they were required to put down a 20 percent down payment on the home, which may be a requirement for a mortgage under a new proposal from federal regulators.
A new Qualified Residential Mortgage rules mimic those passed earlier to encourage banks to do a better job of securing loans.
Despite the economic setbacks Americans have experienced in today’s current climate, it is clear that a strong majority still believe in home ownership and aspire to own a home, said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. However, achieving the dream of home ownership will become increasingly difficult for buyers if they are required to make a 20 percent down payment, which may be a reality for many of tomorrow’s buyers if a proposed Qualified Residential Mortgage rule is adopted.
The QRM rule is important because it will determine the types of mortgages that will generally be available to borrowers in the future. As currently proposed, borrowers with less than 20 percent down will have to choose between higher fees and rates today ” up to 3 percentage points more ” or a 9-14 year delay while they save up the necessary down payment.
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