Home-equity borrowers have more fun Married, well paid, living in East, Midwest

Nation's Housing

January 21, 1996|By Kenneth R. Harney

WASHINGTON -- You want to take charge in 1996, do things your way. You don't want to be hassled. You want to streamline your life -- especially your family's finances. You place a high value on fiscal responsibility, while at the same time you've taken on a far higher debt load than the average American.

Most importantly, you define the home you own as your comfort zone. You're far more involved in do-it-yourself home improvement and decorating projects than is the average person on the street.

Sound like you? If so, you fit the psychographic profile of the growing ranks of homeowners with home equity lines of credit or second mortgages. The profile emerges from the latest national "Yankelovich Monitor" consumer trends study performed by the polling firm, Yankelovich Partners Inc. The study entailed personal interviews with a representative national cross section of 4,000 adults, and was presented at a financial industry meeting sponsored by the Consumer Bankers Association.

Compared with most Americans, according to the new research, home equity borrowers are more likely to be:

* Baby boomers.

* Married, not divorced, separated, widowed or single.

* Highly educated, with nearly 60 percent of borrowers having attended college or graduate school.

* Employed full time with a relatively high income. Nearly one in three households with equity loans have annual incomes of $50,000 to $75,000, while another 28 percent have incomes over $75,000.

A surprise finding: The Northeast and North Central regions produce proportionally more equity borrowers than do the West and the South. For example, with 21 percent of the country's population, the Northeast accounts for 27 percent of home equity borrowers. The West also has 21 percent of the nation's population, but produces just 16 percent of home equity borrowers.

The Yankelovich study found that home equity borrowers nationwide are considerably more familiar with debt than are other Americans. They are, for example, far more likely to have a car loan (49 percent of equity borrowers currently do versus just 31 percent of other consumers), credit cards (90 percent versus 66 percent of the overall population). Despite their heavy use of credit, though, equity borrowers report their current economic state as "comfortable financially" (46 percent) than do other Americans in the cross section (38 percent).

A nearly universal characteristic of home equity borrowers: They see themselves as economizers at heart. In 1996 and beyond, they plan to go after discount deals, buy store brands instead of name brands, use price-off coupons and buy economy-size products far more than the average adult consumer. Retailers take note.

High debt loads notwithstanding, home equity borrowers are big savers. Sixty percent of them report that they're currently saving money for their retirement years versus just 36 percent of other adults.

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