Eight out of 10 non-homeowners recently surveyed by the National Association of REALTORS® (NAR) identify owning a home as part of the American Dream. Their realities—limited affordable housing, perceived lack of a down payment, and student debt—are hampering those aspirations.
NAR’s Aspiring Home Buyer Profile, which analyzes 2016 data from its Housing Opportunities and Market Experience (HOME) survey, shows that despite the sentiment among non-homeowners leaning positive, the share of non-homeowners who believe it is a good time to buy a home steadily declined throughout the year, from 63 percent in the first quarter to 55 percent in the fourth quarter.
“Nearly all non-homeowners said they want to own a home in the future (87 percent), but it’s evident that higher rents and home prices—up 41 percent in the past five years—along with limited entry-level supply and repaying student debt have combined to make buying a challenging goal,” says Lawrence Yun, NAR’s chief economist.
The majority of non-homeowners have not bought a home because they said they are unable to afford it, according to the analysis; 59 percent of non-homeowners with student debt, as well, said they are not comfortable taking on a mortgage.
“In addition to having to postpone important milestones such as getting married and starting a family, many young adults are financially falling behind previous generations in part because of having to prioritize repaying their sizeable student loans over buying a home and saving for retirement,” Yun says.
Eighty-seven percent of non-homeowners, in addition, said they need a down payment of 10 percent or more—a potentially misinformed perception, says NAR President Bill Brown.
“Current non-owners’ ultimate goal of owning a home may not be as far-fetched as they believe,” Brown says. “There are mortgage options available for creditworthy borrowers with manageable levels of debt and smaller down payments. Those interested in buying their first home in 2017 should review their finances, sit down with a lender to see if they qualify for a mortgage and find a REALTOR® to help them get started on their home search.”
For more information, please visit www.nar.realtor.
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