Poll: Few homeowners regret purchase

By Holden Lewis • Bankrate.com                                                                               July 12, 2010

Surprise! Few homeowners regret purchase

Ninety percent of homeowners say they don't regret buying their home despite a nationwide tsunami of foreclosures, short sales and loan modifications, according to a national poll commissioned by Bankrate.com.

By contrast, just 9 percent of homeowners answered "yes" to the question, "Do you have any regrets about buying your current home?"

Americans' contentment with their homes is probably the biggest surprise in a June 24 to June 27 poll of 1,001 randomly selected adults, conducted by Princeton Survey Research Associates.

"People like to own something and make it their own and plant flowers in the front yard," says Anthony LaGiglia, a financial planner and managing director of J.J. Burns & Co. in Melville, N.Y. "Many people feel an attachment to that and wouldn't want to regret it."

Here's a result that's not so startling: Homeowners have become savvier about their mortgages.

In this year's survey, only 8 percent of homeowners with mortgages didn't know whether they have a fixed-rate or adjustable-rate loan, or something more exotic. Compare that to two years ago, when a Bankrate-commissioned poll found 26 percent of borrowers couldn't identify their mortgage type.

Why do you regret having bought your home?

Among homeowners who regret having bought their homes, 31 percent said they feel woeful because they are unable to sell and move on. Another 22 percent said it was because they couldn't afford the monthly mortgage payments.

Some 23 percent said they have regrets for other, unspecified reasons. The rest volunteered their own reasons for wishing they hadn't bought their home.

In this recession, where the best available job might be out of town, it's not surprising that some people regret owning homes that tie them down, LaGiglia says.

"I think the whole idea about being able to up and move -- it's an easier decision for people if you don't have a home."

There's one caveat to these stats. Overall, the poll of homeowners has a margin of error of plus or minus 4.2 percentage points. But the number of regretful homeowners is so small that the figures in the accompanying chart have a margin of error of plus or minus 14 percentage points

Who has the most regrets?

Blacks are more likely than other ethnic groups to say they regret having bought their home, the poll found.

This group was more likely to tell pollsters that they regret buying a home because they can't afford the monthly payments. They were slightly more likely to report having an adjustable-rate mortgage or option ARM.

What type of mortgage do you have?

Americans are more knowledgeable about their home loans than they were even two or three years ago. And it appears that fixed-rate mortgages have become more popular.

It's safe to bet that people found out what type of mortgage they have when they started worrying about it.

"If they're planning to strategically default, they have to know," says Michael Moskowitz, president of Equity Now, a mortgage bank in New York City.

The 2010 poll was conducted by Princeton Survey Research Associates, in a survey of 1,001 randomly selected adults from June 24 to June 27.

The 2007 and 2008 polls were conducted by GfK Roper, in surveys of 1,004 randomly selected adults.

What type of mortgage do the wealthy prefer?

Higher-earning households are more likely to have fixed-rate mortgages.

Those numbers remind Moskowitz of the day in 2004 when Alan Greenspan, the Fed chairman at the time, said in a speech that Americans were wasting money by getting fixed-rate mortgages, and that banks should encourage more borrowers to get ARMs.

"That surprises me. It shows that poorer people were listening to Greenspan, that ARMs were wonderful," Moskowitz says -- again, half-kidding.

Equity Now's underwriting manager, Matt Hackett, says, "It's a complicated thing, though. It could be people who are younger see themselves as making more money in the future, so they take a five-year ARM and they think they're going to be making more in five years to cover the adjustment."

The proportion of homeowners with fixed-rate loans is likely to keep rising. In the last week of June, fewer than 5 percent of mortgage applicants sought ARMs, according to the Mortgage Bankers Association.