As House Passes Middle-Class Tax Increase, Realtors® Say Their Work is Just Getting Started

Washington, D.C. – November 16, 2017 (nar.realtor) The House of Representatives today passed H.R. 1, the “Tax Cuts and Jobs Act,” a bill National Association of Realtors® President Elizabeth Mendenhall has called an all-out assault on homeownership.

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Mendenhall issued the following statement:

“It’s disappointing to see this legislation move forward, but the real work to shape this debate is just getting started. Realtors® will now look to the Senate as we make our case that the tax reform proposals pending before Congress overwhelmingly remove the tax incentive to purchase and own a home in America.

“This is about much more than a cap on the mortgage interest deduction. Rather, it is about whether homeowners will have the rug pulled out from under them with a tax system that suddenly favors renting over owning in a big way.

“Make no mistake, middle-class homeowners will see their home values fall if this proposal moves forward, while large corporations walk away with the bulk of the tax cuts.

“American homeowners shouldn’t have to pay for corporate tax cuts with their home equity. It’s a matter of basic fairness; 1.3 million Realtors® have known since the beginning, and America’s 75 million homeowners are just beginning to learn, that homeowners will be the ones paying the tab. Realtors® will do our part to spread the word as we work with the Senate to address this impending assault on homeownership.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Homeownership is a Shared Value across Party Lines

– The national homeownership rate is at its highest level since 2014, and a full percentage point above the historical low set in the second quarter of 2016

– Nationally, about two-thirds of both Republicans and Democrats agree that owning a home is necessary to live the American Dream

– Seventy-three percent of Republicans and Democrats believe that owning a home increases a person’s standing in the local community

– At least 90 percent of Republicans and Democrats are confident they can afford to stay in their homes as long as they want

Seattle, WA – November 10th, 2017 (PRNewswire) Homeownership is an American value that transcends political parties, according to the Zillow® Housing Aspirations Report™(i). The biannual survey found that 68.7 percent of Republicans and 65.1 percent of Democrats see owning a home as essential to living the American Dream.

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About two-thirds of self-identified Republicans and Democrats agreed that homeownership is key to a higher social status, and close to three-quarters of respondents who identified with either party also believe that being a homeowner increases standing in the local community.

Many issues have a distinct political divide, but the majority of Republicans and Democrats agree on the value of owning a home. National homeownership rates are returning from a historical low point following the housing crisis, a signal that the recession did not fundamentally harm overall sentiment toward homeownership. Millennials, who delayed homeownership but are finally buying homes, are the generation most likely to say homeownership is part of the American Dream, regardless of political affiliation.

“In a time of political division, these survey results remind us of something most Americans share – the sense that owning a home is a big part of living the American Dream,” said Zillow Chief Economist Dr. Svenja Gudell. “Home ownership — and its ability to create wealth, stability, and community – doesn’t depend on political affiliation. As we debate the national and local politics surrounding affordability and tax reform, it’s worthwhile to pause and remember a value most of us can agree on.”

The survey showed Americans across the country agree that buying a home is part of the American Dream and a good financial decision in markets that are regularly setting record-high prices and those that have yet to recover from the housing crash.

Los Angeles is one of the least affordable housing markets in the country, and nearly half of the survey respondents expect they will have to wait at least three years to buy a home. However, Los Angeles residents are more likely than residents of other large metropolitan areas to say that owning a home is necessary to live the American Dream, with 72 percent of respondents agreeing with the statement.

In Las Vegas, home values are still 23.3 percent below the peak values set during the housing bubble(ii), and 15.9 percent of homeowners are underwater on their mortgages(iii). Despite this, 67 percent of respondents agree that homeownership is essential to the American Dream.

The survey also revealed that even amidst rapidly rising home values, most Americans feel confident that they will be able to stay in their current homes as long as they would like, but residents of the most expensive metros are less certain they will eventually be able to buy their own home. Ninety-one percent of Republicans and 89.6 percent of Democrats report feeling confident that they will be able to afford to stay where they live now, but at least 40 percent of respondents in West Coast markets don’t plan on buying a home for at least five years, if they ever do.

Republicans and Democrats alike tend to think that homeownership offers advantages beyond financial benefits. The vast majority of respondents to the survey view owning a home as better for raising a family, making ties within the community, and overall quality of life, regardless of their local housing market.

The Zillow Housing Aspirations Report is a semi-annual survey sponsored by Zillow and conducted by IPSOS. It asks 10,000 renters and homeowners in 20 metros across the country about their views on homeownership and their personal housing expectations for the future.

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Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc. Housing Aspirations Report is a trademark of Zillow, Inc.

(i) The Zillow Housing Aspirations Report is computed from an IPSOS poll which combines sample of 10,000 U.S. adults from 20 U.S. core-based statistical area (CBSA) metropolitans (Atlanta, Boston, Chicago, Dallas, Denver, Detroit, Los Angeles, Las Vegas, Miami, Minneapolis, New York, Philadelphia, Phoenix, St. Louis, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, D.C.) age 18+, surveyed online in English. The survey has a credibility interval of plus or minus 1.1 percentage points for all respondents from the 20 U.S. metropolitans and approximately 5.0 percentage points for an individual U.S. metropolitan. Post-hoc weights were made to the population characteristics on gender, age, region, and race and ethnicity. For more information about conducting research intended for public release or IPSOS’ online polling methodology, please visit the Public Opinion Polling and Communication page.

(ii) https://www.zillow.com/research/september-2017-market-report-17073/

(iii) https://www.zillow.com/research/q1-2017-negative-equity-15888/

Unison Survey Reveals 4 in 10 Americans Find Saving for a Down Payment the Biggest Financial Barrier to Home Ownership

Although 77 Percent Agree Buying a Home Is a Good Financial Decision, Data Shows Why Many Do Not Follow Through

SAN FRANCISCO, Sept. 19, 2017 (PRNewswire) Unison Home Ownership Investors, the leading provider of home ownership investments, today announced findings from its survey of 2,018 Americans, conducted by Atomik Research, on the biggest barriers to home ownership. The findings reveal that there are significant generational and regional differentiators when it comes to housing, including how much is being spent on rent, flexibility in budget and compromises for the ideal home location. While majority of Americans agree that buying a home is a good financial decision, saving enough money for a down payment and the process of getting approved for a loan are the major financial barriers.

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The New York Fed’s recent Household Debt and Credit Report shows total consumer debt in Q2 2017 has increased by $114 billion to $12.84 trillion and student loan debt alone reached $1.3 trillion. Between skyrocketing rents, student loans and debt to pay off, many Americans have a hard time budgeting for a down payment. To understand changes in home purchasing behavior and industry perceptions, Unison’s survey dove deep into the decision-making process to understand barriers of entry, impact on monthly financials and accessibility to additional funds.

The Decision-Making Process to Buy or Not to Buy a Home

Although the majority of Americans understand that owning a home is a sound investment and are willing to make sacrifices for the ideal place, they are not ready to follow through with a purchase. Part of this is a result of not fully understanding the financial benefits or trusting the credibility of information available.

  • Majority of respondents (77 percent) agree that buying a home is a good financial decision, however, 15 percent admit they are not comfortable when it comes to understanding the implications that purchasing a home has on personal finances.
  • Over half (63 percent) agree to some extent that home ownership can reduce the stress and anxiety associated with rentals and moving, and improve mental health.
  • 54 percent agree to some extent that a home mortgage is often less expensive than renting, which can improve family health by freeing up money for healthier food and doctor appointments.
  • Nearly half of respondents (46 percent) would accept a financial strain if it meant living in a neighborhood with high quality schools and was close to good job opportunities.
  • When receiving information on buying a home – 54 percent would trust the credibility of their local realtor/real estate agent; 43 percent would trust their family and friends, or their bank – and only 12 percent would trust their local newspaper.

Financial Barriers Holding Prospective Buyers Back

Once the value of home ownership is understood, there are other financial factors stopping prospective buyers from moving forward. From rising property prices to not being able to save enough money for a down payment, people would rather avoid the hassle. Also, there’s a disconnect between what the respondents felt was required of a down payment for a mortgage, versus what is considered reasonable.

  • Saving for a down payment is the biggest financial barrier for 41 percent of those looking to become home owners; 30 percent find it a headache to get approved for a loan.
  • 56 percent of respondents believe that low wages and debt make it hard to save money in their area.
  • However, the high price of rental homes and apartments are also becoming a major concern for 57 percent of respondents, followed closely by cost to buy or own a home in their area (53 percent).
  • In fact, 66 percent of those surveyed admit paying between $500 and $2,000 per month for rent or mortgage. And, more than half (55 percent) admit this to be a strain on their monthly budget.
  • While 3 in 10 would expect their bank to require a 10 percent down payment for a mortgage, 24 percent felt a 5 percent down payment would be a more reasonable amount.

Generational and Regional Gaps to Home Ownership

The survey found that Millennials, compared to Baby Boomers and Gen Xers, are also far less likely to take the plunge. In addition, in major metro cities where housing is expensive, people are more likely to spend outside of their budgets to purchase a home.

  • Millennials (56 percent) are more likely to be concerned about the cost to buy or own a home than Baby Boomers (47 percent).
  • 56 percent of Millennials reported that they felt ‘very comfortable’ or ‘somewhat comfortable’ understanding the financial options available for purchasing a home.
  • Millennials (38 percent) are less likely than Gen X (51 percent) and Baby Boomers (55 percent) to agree that home ownership allows for deductions on federal, state and local income taxes.
  • Millennials (65 percent) are more likely than Gen X (59 percent) and Baby Boomers (51 percent) to view mortgages as an opportunity to own a home by the time they retire.
  • Millennials (32 percent) are far less likely to own their home compared to Gen X (52 percent) and Baby Boomers (65 percent).
  • Nearly 60 percent of Millennials report rent and mortgage payments as a strain on their budget each month, compared to 58 percent and 43 percent for Gen X and Baby Boomers, respectively.
  • Cities where housing is most expensive (New York City – 59 percent and San Francisco – 54 percent), respondents were most willing to spend outside their budget if the neighborhood had better schools and job opportunities. Portland, Oregon (35 percent) and Hartford, Connecticut (36 percent) were least likely.
  • Los Angeles had the highest percentage of participants paying over $2,000 per month for rent or mortgage (27 percent), compared to the average of 7 percent.
  • Nearly a third (32 percent) of respondents in San Francisco expect they would need to put down 20 percent for a new home mortgage.

“At Unison, we want to make home ownership a reality for more people. To do so, it’s important to study the current landscape and get a granular understanding into why the home ownership rate for the first-time buyer demographic has dropped over the last decade,” said Brian Elbogen, director of research, Unison. “While this survey confirms that saving enough money for a down payment is the biggest financial barrier, we also found that there is a missed opportunity for those who do not understand the benefits of home ownership, and that there are alternative financing options available.”

Methodology

The Unison survey was conducted by Atomik Research on a sample of 2,018 general population respondents in the United States and in accordance with MRA guidelines and regulations. The online survey was fielded between August 7 and 11, 2017. Of the survey participants, 100 respondents were in each of the following cities: Baltimore; Boston; Chicago; Hartford/New Haven, Connecticut; Los Angeles; New York; Norfolk-Portsmouth-Newport News, Virginia; Philadelphia, Phoenix; Portland, Oregon; San Francisco; and Seattle. Atomik Research is an independent creative market research agency that employs MRA certified researchers and abides to MRA code.

For more information on Unison, please visit www.unison.com.

About Unison Home Ownership Investors

Unison is the leading provider of home ownership investments, modernizing home financing through long-term partnerships. Unison works with lenders, regulators and institutional investors to integrate home ownership investing into the U.S. housing finance system. Unison HomeBuyer helps purchasers buy the home they want with less debt and risk, typically by doubling the down payment. The larger down payment makes it easier to qualify for a loan, increases buying power, lowers the monthly payment and/or allows a buyer to reserve cash. Unison HomeOwner provides current homeowners with cash to eliminate debt, remodel, pay for school, invest or as a cash cushion, without the added debt or payments of a home equity loan or HELOC.

Unison’s platforms have received prestigious recognitions including the FinovateSpring 2017 and Benzinga 2017 Best of Show awards. Headquartered in San Francisco, Unison operates in 13 states and has secured over $300M in total capital. For additional information, visit www.unison.com.

Media Contacts

Michael Micheletti
Director of Corporate Communications
(415) 365-0092
Michael.micheletti@unison.com

Ivy Chen
Account Director, MWWPR
(415) 580-6133
ichen@mww.com

Student Debt Delaying Millennial Homeownership by 7 Years

Washington, D.C. – September 18, 2017 (nar.realtor) Despite being in the prime years to buy their first home, an overwhelming majority of millennials with student debt currently do not own a home and believe this debt is to blame for what they typically expect to be a seven-year delay from buying.

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This is according to a new joint study on millennial student loan debt released today by the National Association of Realtors® and nonprofit American Student Assistance®. The survey additionally revealed that student debt is holding back millennials from financial decisions and personal milestones, such as adequately saving for retirement, changing careers, continuing their education, marrying and having children.

NAR and ASA’s new study found that only 20 percent of millennial respondents currently own a home, and that they are typically carrying a student debt load ($41,200) that surpasses their annual income ($38,800). Most respondents borrowed money to finance their education at a four-year college (79 percent), and slightly over half (51 percent) are repaying a balance of over $40,000.

Among the 80 percent of millennials in the survey who said they do not own a home, 83 percent believe their student loan debt has affected their ability to buy. The median amount of time these millennials expect to be delayed from buying a home is seven years, and overall, 84 percent expect to postpone buying by at least three years.

“The tens of thousands of dollars many millennials needed to borrow to earn a college degree have come at a financial and emotional cost that’s influencing millennials’ housing choices and other major life decisions,” said Lawrence Yun, NAR chief economist. “Sales to first-time buyers have been underwhelming for several years now1, and this survey indicates student debt is a big part of the blame. Even a large majority of older millennials and those with higher incomes say they’re being forced to delay homeownership because they can’t save for a down payment and don’t feel financially secure enough to buy.”

According to Yun, the housing market’s lifecycle is being disrupted by the $1.4 trillion of student debt U.S. households are currently carrying2. In addition to softer demand at the entry-level portion of the market, a quarter of current millennial homeowners said their student debt is preventing them from selling their home to buy a new one, either because it’s too expensive to move and upgrade, or because their loans have impacted their credit for a future mortgage.

“Millennial homeowners who can’t afford to trade up because of their student debt end up staying put, which slows the turnover in the housing market and exacerbates the low supply levels and affordability pressures for those trying to buy their first home,” added Yun.

Real Estate Infographic

Repaying student debt is influencing career choices, life milestones and retirement savings

In addition to postponing a home purchase, the survey found that student debt is forcing millennials to put aside several additional life choices and financial decisions that contribute to the economy and their overall happiness. Eighty-six percent have made sacrifices in their professional career, including taking a second job, remaining in a position in which they were unhappy, or taking one outside their field. Furthermore, more than half say they are delayed in continuing their education and starting a family, and 41 percent would like to marry but are stalling because of their debt.

Even more concerning, according to Yun, is that it appears many millennials are putting saving for retirement on the backburner because of their student debt. Sixty-one percent of respondents at times have not been able to make a contribution to their retirement, and nearly a third (32 percent) said they were at times able to contribute but with a reduced amount.

“Being unable to adequately save for retirement on top of not experiencing the wealth building benefits of owning a home is an unfortunate situation that could have long-term consequences to the financial well-being of these millennials,” said Yun. “A scenario where only those with minimal or no student debt can afford to buy a home and save for retirement is not an ideal situation and is one that weakens the economy and contributes to widening inequality.”

A better understanding of college costs is needed

The financial pressures many millennials with student debt are now experiencing appear to somewhat come from not having a complete understanding of the expenses needed to pay for college. Only one-in-five borrowers indicated in the survey that they understood all of the costs, including tuition, fees and housing.

“Student debt is a reality for the majority of students attending colleges and universities across our country. We cannot allow educational debt to hold back whole generations from the financial milestones that underpin the American Dream, like home ownership,” said Jean Eddy, president and CEO at ASA. “The results of this study reinforce the need for solutions that both reduce education debt levels for future students, and enable current borrowers to make that debt manageable, so they don’t have to put the rest of their financial goals on hold.”

“Realtors® are actively working with consumers and policy leaders to address the growing burden student debt is having on homeownership,” President William E. Brown, a Realtor® from Alamo, California. “We support efforts that promote education and simplify the student borrowing process, as well as underwriting measures that make it easier for homebuyers carrying student loan debt to qualify for a mortgage.”

In April 2017, ASA distributed a 41 question survey co-written with NAR to 92,419 student loan borrowers (ages 22 to 35) who are current in repayment. A total of 2,203 student loan borrowers completed the survey. All information is characteristic of April 2017, with the exception of income data, which is reflective of 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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1. According to NAR’s annual Profile of Home Buyers and Sellers, the percent share of first-time buyers in the past three years is 33 percent, which is below the long-term historical average of near 40 percent.

2. According to 2017 research on student debt from Experian. (link is external)

Media Contact:

Adam DeSanctis
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Homeownership a Common Interest, Deserves Protection in Tax Reform Debate

Washington, D.C. – September 14, 2017 (nar.realtor) Tax reform done right could yield savings and simplification that benefits average Americans, but history shows that misguided reforms can pose significant threats to the economy.

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That’s the message the National Association of REALTORS® brought to Congress today as Iona Harrison, chair of NAR’s Federal Taxation Committee, testified (link is external) before the Senate Finance Committee.

At the hearing, titled “Individual Tax Reform,” Harrison told senators that putting homeownership in the crosshairs of tax reform would strike at millions of American households.

“Real estate is the most widely held category of assets that American families own, and for many Americans, it’s the largest portion of their family’s net worth,” Harrison said. “As 64 percent of American households are owner-occupied, we believe that homeownership is not a special interest, but is rather a common interest.”

Over the past year, proposals for tax reform have included the elimination of important benefits like the state and local tax deduction, a near doubling of the standard deduction – which would all but nullify the benefits of the mortgage interest deduction – as well as caps to the MID.

REALTORS® have warned lawmakers that proposals to limit or nullify the tax incentives for homeownership could actually raise taxes on millions of middle class homeowners while putting the value of their homes at risk.

In her testimony, Harrison responded to critics of real estate deductions, who often claim those deductions benefit only a small number of wealthy individuals. Harrison noted:

  • 70 percent of the value of real property tax deductions in 2014 went to taxpayers with incomes less than $200,000
  • 53 percent of individuals claiming the itemized deduction for real estate taxes in 2014 earned less than $100,000
  • 32.7 million tax filers claimed a deduction for mortgage interest in 2015
  • Half of taxpayers with mortgages over $500,000 have AGI below $200,000., according to research conducted for NAR.

To that end, Harrison reminded the committee that tax reform efforts in the late 1980’s were fraught with unintended consequences that delivered a broadside to the economy and only offered brief tax relief.

“When Congress last undertook major tax reform in 1986, it eliminated or significantly changed a large swath of tax provisions, including major real estate provisions, in order to lower rates, only to increase those rates just five years later in 1991,” said Harrison. “Most of the eliminated tax provisions never returned and in the case of real estate, a major recession followed.”

Despite the REALTORS®’ concerns raised during the hearing, Harrison reminded Senators that REALTORS® do support tax reform.

“Homeowners already pay 83 percent of all federal income taxes, and reform that raises their taxes is a failed effort,” said Harrison. “But NAR supports the goals of simplification and structural improvements for the tax system, and individual tax rates should be as low as possible while still providing for a balanced fiscal policy. We simply believe that to achieve these goals, Congress should commit first to doing no harm to the common interest that homeownership provides.”

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Media Contact:

Jon Boughtin
(202) 383-1193
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84 Percent of Americans See Homeownership as Good Investment, Affordability a Growing Concern

Washington, D.C. – July 12, 2017 (nar.realtor) According to the National Association of Realtors®’ 2017 National Housing Pulse Survey, concerns over housing affordability show clear demographic divides especially among unmarried and non-white Americans. More than five out of 10 unmarried and non-white Americans view the lack of available affordable housing as a big problem, compared to only 40 percent of married and white Americans.

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The survey, measures consumers’ attitudes and concerns about housing issues in the nation’s 25 largest metropolitan statistical areas and found that 84 percent of Americans now believe that purchasing a home is a good financial decision – the highest number since 2007. Yet six in 10 said that they are concerned about affordability and the rising cost of buying a home or renting in their area. Housing affordability was ranked fourth in the top-five issues Americans face in their area behind the lack of affordable health care; low wages and debt making it hard to save; and heroin and opioid drug abuse, and ahead of job layoffs and employment.

Nationally, 44 percent of respondents categorized the lack of available affordable housing as a very big or fairly big problem. In the top 25 densest markets, more than half see the lack of affordable housing as a big problem, an increase of 11 percentage points from the 2015 National Housing Pulse Survey. Low-income Americans, renters and young women most acutely feel the housing pinch. There is also greater concern about affordable housing among the working class (65 percent) than for public servants such as teachers, firefighters or police (55 percent).

“Despite the growing concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own. Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top reasons to own a home,” says NAR president William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties.

Eight out of 10 believe that the most important financial reason to own a home is that the money spent on housing goes towards building equity rather than to a property owner. Paying off a mortgage and owning a home by the time you retire is the next most important financial reason for buying a home followed by ownership being a good investment opportunity to build long-term wealth and increase net worth.

When asked about the amount of down payment needed for a mortgage, four in 10 respondents believe that a down payment of 15 percent or more is necessary. Seventy percent feel that a reasonable down payment should be 10 percent or less, according to the survey. Misperceptions about higher down payment requirements were most prevalent in bigger cities and by older adults.

Apparent confusion about down payment requirements most likely added to non-owners concerns about affordability. NAR’s Profile of Home Buyers and Sellers found that the median down payment for first-time buyers has been 6 percent for three straight years and 14 percent for repeat buyers in three of the past four years.

Over 50 percent of respondents strongly agree that homeownership helps build safe and secure neighborhoods and provides a stable and safe environment for children and family members.

The survey also found that four in 10 Americans say paying their rent or mortgage is a strain on their budget. Those most likely to say their mortgage is a strain have incomes under $60,000, are residents of New York City or the Pacific coast, are under the age of 50 and non-white. Just over half, 51 percent, of respondents said they were willing to strain their budget for a better living environment and would pick a neighborhood with better schools and job opportunities even if housing prices are a bigger strain on their budget. Those most willing to strain their budget are disproportionately married, upper income and living in the suburbs. Overspending on homes is more prevalent in Northeastern cities (36 percent), the Mountain West (34 percent) and the Pacific coast (33 percent).

The 2017 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program, which aims to position, educate and help Realtors® promote housing opportunities in their community, in both the rental and homeownership sectors of the market. The telephone survey polled 1,500 adults nationwide and has a margin of error of plus or minus 2.5 percentage points.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Media Contact:

Cole Henry
(202) 383-1290
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