Whether it's 'acceptable' to walk away from a mortgage, and other questions
A few highlights from a new Pew Research Center survey of Americans' attitudes toward housing, which focused mainly on the question of walking away from a mortgage:
--- Twenty-one percent of homeowners said they believe they’re currently underwater on their homes, meaning the mortgage balance exceeds the market value of the house. That is almost exactly in line with the 21.5% second-quarter estimate by Zillow Real Estate Market Reports.
Of course, you don't know for sure if you're underwater unless you actually try to sell your house.
--- Nineteen percent of the 2,967 survey respondents (1,937 of whom were homeowners and 1,030 renters) said it was “acceptable” to walk away from a home loan, while 17% said it depended on the circumstances. Fifty-nine percent said walking away was “unacceptable” and 5% either didn’t know or wouldn’t answer.
But Pew conceded that there’s a caveat about the 19%-acceptable/59%-unacceptable percentages. The survey didn’t offer “it depends on the circumstances” as an answer, but allowed that as a response if people volunteered it. “The fact that so many respondents volunteered this response suggests the proportion whose opinion of walking away lies somewhere between acceptance and outright rejection would have been even larger had it been offered as a choice,” Pew said.
In other words, fewer than 19% may sanction walking away regardless of the circumstances, and fewer than 59% may be opposed altogether.
--- People in the West were more likely to side with walkaways, which fits with the higher percentage of homeowners in the region who believe they're underwater. Twenty-five percent of Westerners said walking away was acceptable, versus 19% for Midwesterners, 18% for Southerners and 16% for Easterners.
--- Despite the housing market’s deep slump of the last few years, 39% of respondents said they “strongly agree” with the idea that “buying a home is the best long-term investment in the U.S.” An additional 41% “somewhat agree,” while 10% “somewhat disagree” and 7% “strongly disagree.”
Pew compared the best-long-term-investment responses to a CBS/New York Times poll of April 1991. In that poll, 49% of Americans “strongly agreed” that a home was the best long-term investment, while 35% “somewhat agreed,” 9% “somewhat disagreed” and 4% “strongly disagreed.”
So the vast majority of people still seem inclined to believe that housing will be the smartest investment over time.
-- Tom Petruno
Photo: People waiting in line outside the Palm Beach, Fla., convention center last month to speak with loan counselors about restructuring mortgages. Credit: Joe Raedle / Getty Images