Despite more than half of surveyed Americans reporting a loss of value in their homes of at least 10% during the housing market decline, 68% say their home’s value is still very or somewhat important to their retirement plan, a new COUNTRY Financial homeownership survey reveals.
That number shoots up to 83% of those between the ages of 18 and 29, although nearly 60% of homeowners now question whether buying a house is the best investment a family can make, says COUNTRY.
Source: COUNTRY Financial, 2011
This may be because most homeowners would experience a “mortgage gap” in their ability to pay a mortgage if they lost their job for a prolonged period of time.
The unemployment rate has hovered between 9 and 10% for much of the past couple years, a scary number for the 68% of homeowners who say they wouldn’t be able to keep up with mortgage payments after nine months if they lost their job,
It’s especially bad new as the current average unemployment length is nearly 10 months, according to the U.S. Bureau of Labor and Statistics.
For some, the “gap” is even narrower. Nearly one third of survey respondents, at 31%, say they could maintain mortgage payments for just three to six months if they lost their jobs. More than one in four, at 27%, would only be able to pay for three months.
“The housing market decline and high unemployment has put a strain on everyone. Although there’s no quick fix, having a financial safety net can help. If possible, start an emergency fund to offset those unexpected life changes like unemployment,” said Keith Brannan, vice president of financial security planning, in a statement. “If you’re concerned about your mortgage, seeking professional advice to reprioritize your income can help you protect your current possessions and budget for future expenses.”
Written by Alyssa Gerace