Shedding light on perhaps emerging new attitudes toward a growing number of homeowners who are “under water” or “upside down” on their mortgage, more than one-third of Americans said it is acceptable for homeowners to stop mortgage payments and essentially walk away from their home, according to a new survey from the Pew Research Center. Yet the majority (59 percent) said this increasingly common practice is unacceptable.
The survey, reportedly conducted from May 11 to 31 and surveyed 2,967 adults with a random sampling of telephone calls, said that 48 percent of homeowners have lost value in their homes during this recession, while 21 percent are “under water” on their mortgage; that is, they owe more toward their home than it is currently worth. Facing this situation, some homeowners are electing to stop making mortgage payments and move out of their homes, which in turn forces the bank to assume responsibility for the outstanding mortgage.
Of the 36 percent who approved of walking away from a mortgage, 19 percent agreed it is acceptable under any terms, while 17 percent said it is acceptable depending on context and circumstances. A surveyed person’s current economic standing seemed to affect his/her attitude toward this practice: just 14 percent of those who approve said they live comfortably versus 47 percent of those who approve are just barely or not able to meet expenses at all. Twenty-five percent were currently struggling to pay their own bills, attain medical care, or have had to borrow money from a family member to pay bills.
More approved of walking away from a mortgage if they themselves are currently unemployed versus those who are employed. Democrats, people who live out West—where the housing market is perhaps at its worst—people under the age of 65 and city dwellers are all generally more agreeable to the practice than their counterparts. Men slightly outnumber women in approval of the practice (22 versus 18 percent) and the less-educated (high school or less) are more likely to accept the practice than those who have attended at least some college (21 versus 18 percent). Twenty-five percent of renters said it is okay to walk away from house payments.
Although the recession and housing market woes seem to be causing a slight increase in approval of walking away, note that the number of people who do not approve of this practice—no matter the circumstance—still largely outnumbers those who do approve. Even 75 percent of people who are struggling to pay their own bills and attain medical care and 62 percent of those unemployed do not approve of homeowners walking away from a mortgage.
To view the complete results of the study, click here.
Written by Clare Pierson