Genworth Financial Debuts The International Mortgage Trends Report
Home Buyer Confidence Affected By Worries about Government Economic Policy and Personal Finances; Mortgage Insurance Seen As Global Benefit
RICHMOND, Va., June 10, 2011 /PRNewswire/ — A new global survey suggests that home buyers around the world are poised to re-enter the housing market, but property market instability and worries about their personal finances are holding them back.
The International Mortgage Trends Report, commissioned by Genworth Financial and conducted by independent research firm RFI, is a new global survey of current and aspiring homebuyers aimed at gaining local insight into key world markets. More than 9,000 respondents across five continents in eight countries were interviewed. Countries surveyed were: Australia, Canada, India, Ireland, Italy, Mexico, the United Kingdom and the United States.
“As the world’s only global mortgage insurer we saw an opportunity to examine global market forces influencing the decision to purchase a home,” said Kevin D. Schneider, president of U.S. mortgage insurance for Genworth Financial. “We hope the findings in this report help to encourage a deeper understanding of the challenges that are likely to shape business strategies in the near to medium term as well as provide the mortgage industry in all markets with insights that help identify future opportunities for business growth.”
Of the many factors that influence the decision to buy a home, consumer confidence is one of the most important. Survey responses indicated that concerns about the rising cost of living, property market instability and the impact of government-led austerity measures have eroded home buyer confidence in some countries, and have led consumers to adopt a wait-and-see attitude. Survey respondents in the United Kingdom, for example, say they will not actively enter the housing market this year. Some other key findings:
- Consumers in many countries are more concerned about personal finances than their nation’s economies. While countries with somewhat less developed economies tend to be more optimistic about their respective nation’s finances than countries with more established economies, those concerns were secondary to survey respondents’ fears about their own financial affairs.
- Comfort with indebtedness colors how households around the world view their financial situation as well as their approach to buying a home. Borrowers in India and Mexico stay out of debt by accumulating savings while living with parents and grandparents. People surveyed in those countries tend to be more concerned about housing affordability. Survey respondents in the U.S., U.K., Ireland, Canada and Australia are more apt to be comfortable with higher levels of debt. Respondents from those nations are less concerned with housing affordability than the impact of rising utility costs and gasoline prices.
- Despite worries over personal finances, survey respondents in many countries saw clear opportunities in the property market for those who could afford to buy.
- There was widespread support of mortgage insurance for all types of property buyers including investors and repeat homebuyers. Consumers around the world appear to have an increased awareness and understanding of the value mortgage insurance provides in helping them purchase a home sooner with a lower down payment.
Key Country Findings
- Canadian borrowers are generally comfortable with high levels of debt and nearly half of all Canadian respondents were positive about the outlook for their economy and housing market.
- Indian homebuyers are generally upbeat about the economy and their personal finances and believe a combination of mortgage insurance and product innovation could help new property buyers get into the market sooner.
- Homebuyer confidence in Italy remains weak, as just over half of survey respondents were worried about their national economy. Concerns about personal finances have prompted two thirds of those who would ideally like to buy property now to conclude they are not in the financial position to do so.
- Indebtedness is rising in Australia and with it, increasing concerns about personal finances and housing affordability. Despite that, the vast majority of Australian home owners had no trouble meeting their mortgage payments in the last year and nearly half overpay their mortgage.
- Worries about future unemployment and personal security have contributed to Mexican survey respondents’ less positive attitude toward their property market. A housing shortage in Mexico is also having a negative impact on affordability.
- The United Kingdom
- U.K. respondents are more optimistic on average about the property market but worries about their national economy and personal finances will likely keep homebuyers from entering the property market this year.
- United States
- Nearly two-thirds of Americans surveyed believe now is a good time to buy a home and think mortgage insurance is a good way to help them to do it. However, that optimism is tempered by concerns about how the U.S. economy will perform in the next year and the impact of falling home prices on Americans’ personal finances.
Due to affordability issues — high home prices, higher costs of living, or fear of rising interest rates — the average age of first-time home buyers has risen in all countries except India over the last 40 years. The average age at which a person in the U.S. was able to purchase a first home rose from 27.3 in the 1970s to 31.6 in the 2000s.
One aspect of the home buying process that appears to be universally recognized as a benefit in countering this trend is private mortgage insurance. In the U.S., 88 percent of survey respondents said private mortgage insurance helps them buy a home with a smaller down payment.
“There is no universal answer to the problem of housing affordability,” Schneider said, “but clear initiatives need to continually be developed to meet changing conditions and improve the opportunities so more people can realize their dream of home ownership. If this can be achieved there is good cause for optimism for the future of housing markets globally.”
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company with more than $100 billion in assets that is dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement -- including life insurance, long term care insurance, financial protection coverages, and independent advisor-based wealth management -- and mortgage insurance that helps consumers achieve homeownership while assisting lenders in managing their risk and capital.
Genworth has approximately 6,500 employees and operates through three segments: Retirement and Protection, U.S. Mortgage Insurance and International. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, which traces its roots back to 1871, became a public company in 2004 and is headquartered in Richmond, Virginia. For more information, visit Genworth.com. From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of Genworth.com.