Owning your own home is the great American Dream, right? Would it surprise you to know that 66 percent of all people believe this to be the case? On top of that, 72 percent of people believe that owning a home raises a person’s standing in their community. What this sounds like, to me, is that lots of people want to become homeowners. What could be holding them back?
The answer, according to the Idaho Business Review, is the down payment. With some mortgages requiring a full twenty percent down, it can be downright impossible for people just starting out, or for renters, to save up enough to fulfill their dreams of homeownership.
The IBR quoted the Zillow Housing Aspirations Report as stating that 70 percent of renters want to buy their own home right now, but can’t come up with the down payment. This was a bigger struggle, as per the report, than outstanding debt, job security, or qualifying for a mortgage. Half of all renters say that outstanding debt is a barrier to owning a home, and half (presumably overlapping with the first half to some degree) say qualifying for a mortgage is their bugaboo. Only 40 percent of renters say that they are being held back by lack of job security.
Right now, the percentage of homeowners in America is at an all-time low. It has hovered down there since about 2004. On the other hand, the largest group of the U.S. population - millennials - are coming of age and starting to think about settling down and buying a home. Unsurprisingly, given the demand, rents are at all-time highs from coast to coast. In some cities, the average rent is a full fifty percent of the median income. In 33 of the 35 largest U.S. metro areas, a mortgage is cheaper than monthly rent… but renters cannot get their own homes because of the hurdle of the down payment.
The Zillow report was full of interesting observations about renters in the United States. For one thing, 63 percent of renters feel that they will be able to afford a home “someday.” Thirty-four percent say that they hope to own a home within 3-5 years, and almost a quarter say that they believe they will be homeowners in a year or two. Only two percent of millennials who rent say that they never plan on buying a home.
