Those living in the South and Midwest are more likely to think homeownership is within reach
Washington, D.C. – (RealEstateRama) — When it comes to renting versus buying a home, people across the country express their dissatisfaction: Only 44 percent say homes are affordable for first-time buyers and almost two-thirds agree high rent is making it impossible to save for a future house, according to the annual NeighborWorks America at Home survey.
Regionally, many living in the Northeast and the West believe homeownership is out of reach, and for good reason. Median house prices track significantly lower in the Midwest ($291,000) and South ($284,000) than for those in the Northeast ($490,000) and West ($390,000). Fewer than half of U.S. adults think houses are affordable for first-time buyers.
In addition to high rent, people of color and millennials say lack of a down payment and weak or bad credit are their greatest obstacles to buying. And 1 in 3 Americans have delayed purchasing a home, or know someone who has, due to student loan debt. Those under 30 (58 percent), African-Americans (55 percent) and Hispanics (54 percent) reported having some amount of student loan debt.
The NeighborWorks America survey found people who do not currently own homes may not be on track to achieve that goal. Of the renters (31 percent of adults), just 1 in 10 say they definitely have enough savings to afford a down payment on a home purchase. The vast majority (70 percent) say they definitely or probably do not have those savings.
On average, consumers think 20 percent is the minimum down payment required to buy a house. In fact, however, a down payment as small as 3.5 percent is sufficient for many mortgages. Also complicating the matter is the difficulty of the process of buying a home. Millennial and nonwhite consumers particularly are confused about how to qualify for a mortgage, and these are the individuals who will influence the strength of the housing market for years to come. A majority of people find the process complicated (73 percent agree) and this is especially true among renters (82 percent).
Editor’s note: Finn Partners conducted the national survey in August of 2018 with an online panel of 1,000 adults ages 18 or older. Previous surveys dating back to 2013 are archived.
About NeighborWorks America
For nearly 40 years, Neighborhood Reinvestment Corp. (d/b/a NeighborWorks America), a national, nonpartisan nonprofit, has created opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $27.2 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.