Out: Faith that home prices always rise. In: Fear.
Yes, enlightenment hurts. All kidding aside, as a nation we've obviously paid an incalculable cost -- in wealth, economic productivity and sheer human misery -- for the housing bubble. And an overdose of anxiety about the future can keep an economy on the nod for years.
But such downturns aren't called "corrections" for nothing. They have a way of restoring sanity, if only for a little while. That bout of lucidity is a chance to deleverage and shed illusions, along with our financial debt (Exhibit A: Markets, we've learned, are roughly as free as lunch).
One major attitudinal shift is that fewer people are gung ho on real estate, Fannie Mae found. About 70 percent of people today think a home is a safe investment, down from 83 percent in 2003. By comparison, 17 percent believe buying stocks is safe, versus 25 percent six years ago.
Another change is that many more Americans -- 1 in 3, in fact -- are freaked out about being able to pay their mortgages and other bills. Most also are worried that they don't have enough savings. Again, that may be a good thing, because most are probably right.
And how about this for a cold slap? Some 60 percent of respondents think it's tougher for them to get a home loan than it was for their parents, while an even higher percentage believe that will be even harder for the next generation. Parents: If you think it's bad when your college-age kids move back home, just wait until those college-age grandkids come scurrying back (take the pain!).
Other findings from the survey, which consisted of phone interviews with more than 3,000 homeowners, renters and other people:
- 65 percent of respondents prefer owning a home to renting, citing non-financial reasons such as safety and quality of schools as key factors in wanting to buy
- Americans with 30-year fixed-rate mortgages are far more satisfied with their loans than those with other types of mortgages, such as ARMs
- People cite poor credit, inadequate income, insufficient funds for a down payment and job insecurity as the top obstacles to getting a home loan
- 60 percent say it would be difficult to get a mortgage loan today, with weak credit the biggest impediment
- 61 percent of people believe the economy is on the wrong track; but 82 percent also expect their family's financial situation to remain the same or improve
- Nearly a third of mortgage borrowers see themselves as being "under water" on their homes
- Roughly 90 percent of Americans, including seven in ten who are delinquent on their own mortgages, say it's unacceptable for people to stop making payments on an underwater mortgage
- Seriously underwater borrowers were more than twice as likely to believe that it's OK to stop making loan payments as homeowners who aren't so deep in the hole.
One thing that hasn't changed -- there's still no place like home. Whatever the risks, nearly two-thirds of Americans want a place to call their own. Like the songs say, it's where the heart is. Why, even as I type I can almost picture my 1.7 kids frolicking in the yard with Fido, who's eyeballing those burgers sizzling on the grill.
Hmmm, sounds expensive. Maybe I'll just build that white picket fence around my new iPad and call it a day.