North Texas Renters Show Surprising Interest in Buying a Home, Texas Trust Survey Reveals

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A Texas Trust survey indicates a more pragmatic and less idealized vision of home ownership. Financial motivations were the dominate reasons both renters and current home owners were interested in purchasing homes.

For 65 percent of those surveyed, the elimination of the home loan interest deduction wouldn’t diminish their interest in home ownership.

According to our survey, Dallas-Fort Worth area residents no longer see home ownership as the American dream. Instead, they're coming to see it more as a financial investment designed to grow their net worth.

Only one in eight North Texas homeowners is interested in selling their house and buying another right now, an extensive survey by Texas Trust Credit Union shows. But there is high interest in home buying among people who are currently renting apartments or houses.

Texas Trust, one of the largest credit unions and residential mortgage lenders in North Texas, conducted its first online survey of homeowners and renters in mid-August to gauge attitudes about home ownership.

While the survey reflects a slowly recovering housing market in the region, it also spotlights a more pragmatic and less idealized vision of home ownership.

For example, 83 percent of non-homeowners surveyed say they are interested in buying a house, either this year or within the next five years. Of those, three out of four indicate their main motivations are financial, not emotional: 34 percent see home ownership as a better investment than renting, and 28 percent see it as an investment in their family’s financial future. Seven percent want to build equity and another 7 percent are motivated by the home interest tax deduction. Only 22 percent are motivated by the "emotional" attractions of the personal pride of home ownership or having something to pass along to their children when they retire.

Among the current homeowners surveyed who are interested in buying another house at this time, financial motivations also dominated. Among this group, 50 percent are attracted by current low interest rates, while 18 percent relish the idea of getting a bigger house for less money and 16 percent simply see another house as a good investment at this time.

"What motivated most people to buy houses in the past isn't necessarily the same as what motivates them today," said Richard Whitman, Vice President of Mortgage Lending at Texas Trust Credit Union. "According to our survey, Dallas-Fort Worth area residents no longer see home ownership as the American dream. Instead, they're coming to see it more as a financial investment designed to grow their net worth."

In light of political discussions about the elimination of the home loan interest tax deduction as part of an overall streamlining of the U.S. tax code, the survey asked homeowners about the importance of that deduction to them. For 65 percent of them, elimination of the deduction wouldn’t diminish their interest in home ownership. But 8 percent said they wouldn’t be interested in owning a home without the deduction, and 27 percent were uncertain.

Interestingly, both renters and homeowners expressed a strong desire for a personal relationship with the financial institution holding their mortgage. That desire was particularly important to renters, with 88 percent of them considering the relationship very important or at least somewhat important. Overall, across all groups, this relationship was very important or somewhat important to 82 percent of all respondents.

"When you consider that home ownership is viewed as a financial investment, it is no surprise that consumers view the relationship with their mortgage holder as highly important," said Whitman.

Unlike many large lenders, at Texas Trust, we have a vested interest in keeping mortgage loans in-house and servicing members for life, Whitman added.

Among other noteworthy findings in the survey:

  •     Of the renters interested in buying a home, 77 percent define an "affordable" down payment as five percent or less of the price of the home; among current homeowners, only 48 percent define affordable that way, with 26 percent of respondents happy with 10 percent down, and 23 percent of them agreeable to a 20 percent or higher down payment.
  •     60 percent of renters interested in buying a home say they would prefer to buy an existing home; 40 percent prefer a new or custom-built home.
  •     31 percent of all current homeowners are considering refinancing (41 percent for those interested in another house and 28 percent for those not currently interested in moving). 24 percent have refinanced within the last two years, and 19 percent say their mortgage is paid off.
  •     74 percent of all current homeowners say they are not under water on their home, that they do have equity. Only 9 percent say they don’t have equity, and 17 percent are unsure.
  •     84 percent of homeowners say they have never missed a mortgage payment; 13 percent admit to missing five payments or less during the life of their mortgage.
  •     Only one in four renters interested in buying a home – 24 percent – expressed confidence in their ability to get a home loan. More than 50 percent said obtaining a loan would be challenging or difficult, and the others weren’t sure.

A total of 1,719 respondents took part in the survey, about 86 percent of whom are members of Texas Trust.

Supporting graphics for the Texas Trust Home Buyer Survey are available online.

About Texas Trust Credit Union
Texas Trust is one of the largest credit unions in North Texas and the 21st largest in Texas. It has been operating for more than 75 years. As a full-service financial institution, Texas Trust offers checking, savings, mortgages, credit cards, CDs, Money Market accounts, IRAs, and investment and insurance services. Its business services include SBA and conventional loans, electronic payment cards, checking and money market accounts, merchant card processing, online banking, insurance, and the Employee Solutions Network. With 58,000 members and assets of more than $721 million, Texas Trust operates in Dallas, Tarrant, and Henderson counties, as well as parts of Ellis and Johnson counties. Texas Trust has eight branches located in Mansfield, Grand Prairie, Arlington, Cedar Hill, and Athens. For more information, visit http://www.TexasTrustCU.org. Texas Trust is a federally insured financial institution. Deposits up to $250,000 are insured by the full faith of the federal government through the National Credit Union Administration (NCUA).

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Kristine Tanzillo
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