"The overcorrection in the mortgage market is a drag on the process," Kent Colton, senior fellow at the the Harvard University Joint Center for Housing Studies, said in a statement. " We've gone from one extreme to the other and it's stalling the housing market and therefore the economy." He presented the survey findings in a phone conference with reporters on Tuesday. The survey respondents included more than 3,000 homeowners and renters across the United States.
More than 50% of the renters polled said they simply cannot afford a down payment. Just behind down payment concerns on the list were a lack of motivation and a lack of confidence: 45% of renters said they did not feel any urgency to enter to market and 38% expressed concern that they may not qualify for a mortgage. More than half of renters said their job income needed to improve in order to enter the market, followed by lower down payment requirements and an improved credit score.
In short term, the picture for the housing market remains "uncertain" through end of next year, said Colton, with little urgency from buyers and renters to make a move. He added that policy changes in the mortgage market could help motivate more buyers to enter the market. Over the longer term, Colton expressed optimism that the housing market would return to a sustainable equilibrium.
"We will continue to bounce on bottom, and at some point, people will realize it is a good time to buy and act on that, and we will see a bump up on sales," he said.