Homeownership doesn't have the same allure as it did last year, but more Americans believe it's tough to beat homeownership as a top investment.

Those mixed reactions stem from a housing recovery that has become a win-lose proposition, according to Trulia Inc.'s Summer 2013 American Dream Survey.

Rising interest rates and booming home prices put a dent in the American Dream of homeownership, but those same rising prices are beginning to restore belief in the investment approach to real estate.

Only 67 percent of Americans believe homeownership is part of their personal American Dream, compared to 72 percent seven months ago, Trulia found.

Despite lost faith in the dream, the percentage of consumers who say owning a home is one of the best long-term investments they could make has increased from 47 percent to 60 percent, over the past two years.

"The rising cost of homeownership cuts both ways for consumer confidence," said Jed Kolko, Trulia's chief economist.

"The combination of rising rates and rising prices has made owning 20 percent more expensive, leading people to downsize their housing dreams. But rising prices make housing look like a better financial bet," Kolko added.

Trulia's survey, conducted by Harris Interactive from June 24-26, 2013 queried 2,029 adults ages 18 and older.

Buyers worried.

The survey also found, the housing recovery may be good for the economy, but not so much for prospective homebuyers.

Homebuyers worry about higher mortgage rates, rising home prices, qualifying for a mortgage and other concerns.

• Overall, 41 percent of buyers worry mortgage interest rates will price them out of the market. In the hottest markets, more buyers, 45 percent, have the same concern.
  
  The hottest markets are U.S. metros where prices increased more than 15 percent year-over-year in June 2013, according to the Trulia Price Monitor.

• Among all home buyers, 37 percent of buyers are concerned that home prices will rise before they go to market, compared to 42 percent in hot markets.

• Thirty-six percent of all homebuyers surveyed fret that they won't be able to find a home they like because of the limited supply, compared to 38 percent in booming markets.

• The percentage of all buyers who fear they won't qualify for a mortgage was 30 percent, compared to 25 percent in the hottest markets.

• Among all buyers 27 percent are anxious about competition in the market, compared to 33 percent in the hottest markets.

To quell some of their fears, more buyers plan to purchase smaller homes.

Among those who said owning a home is part of their American Dream, just 7 percent say their ideal home size would be 3,200 square feet or larger, down from 11 percent last year.

Also, 66 percent of buyers plan to curb their fears by using aggressive tactics, including bidding above asking, borrowing more from family or friends for the down payment, paying the seller's closing costs, writing personal letters, and removing contingencies.

Beware, real estate associations warn that removing all contingencies might raise a buyer's profile, but without contingencies, buyers put their good faith deposit at risk if any part of the deal falls through because the buyer can't deliver on the sales agreement.

©2013 RealtyTimes