While more than two-thirds of Americans (68 percent) feel that now is a good time to buy a home, many may be reluctant to do so because of uncertainty about qualifying for a mortgage or navigating the homebuying process, according to the recent “How America Views Homeownership” survey by Wells Fargo & Company and Ipsos Public Affairs.
“Although the homebuying process has changed in many ways in recent years, our survey found Americans still view homeownership as an achievement to be proud of and many believe that now is a good time to buy a home,” said Franklin Codel, head of Wells Fargo Home Mortgage Production. “Our survey also suggests we have an opportunity as lenders, non-profit agencies and real estate agents to better inform Americans about credit ratings, mortgage costs and housing affordability. This would help demystify the homebuying experience for many consumers.”
The nationwide survey of 2,017 adults also revealed many Americans report that their financial houses are in order, which improves their ability to buy a home. For example:
►82 percent of respondents said that they understand how to manage their personal finances (how to save, earn and invest money, and work within a budget), and the same proportion, 82 percent, agreed that they generally do not spend beyond their means.
►63 percent of respondents have a “rainy day fund,” including more than half of the millennial respondents, ages 18-34.
►Most respondents are also careful with their money: Only 27 percent agreed that they tend to spend their money and not think twice about it.
Though 74 percent of the survey respondents said they “know and understand” the financial process involved in buying a home, respondents also gave answers that suggest they may not be aware of all their options as prospective homebuyers:
►30 percent of respondents believe that only individuals with high incomes can obtain a mortgage.
►64 percent of respondents believe they must have a “very good” credit score to buy a home.
►While 64 percent of respondents said that they are knowledgeable about how much of a downpayment is needed to buy a home, nearly half (44 percent) also believe that a 20 percent downpayment is required. In reality, a 20 percent down payment is not a requirement on many loan programs.
►When respondents were asked to list the biggest barriers to owning a home, lacking the funds for a downpayment was among the top issues, especially for respondents aged 18-34.
►Nearly half (44 percent) of the respondents said that they know nothing or very little about the closing costs required for buying a home.
►About half of the respondents feel they do not have access to homes that fit their needs financially.
“It is important for prospective homebuyers to feel empowered to ask lenders and real estate agents questions about available options, such as down payment assistance or FHA loan programs or VA loans for veterans,” Codel said. “Ninety-five percent of survey respondents said they want to own a home if they don’t already. Informing prospective homebuyers about their options is the first step toward helping them realize their goals.”
