What’s Holding Homebuyers Back?

A recent survey from nonprofit organization NeighborWorks America found that 31% of adults who want to buy a home consider it an unattainable goal, but programs for down payment assistance and homebuyer counseling are among a number of tools intended to help buyers achieve homeownership. Yet many would-be home buyers are unaware of such programs.

Consider that while 72% of those surveyed are actively saving for a down payment, only 25% of people who want to buy a home are aware of and have researched down payment assistance programs. Additionally, many prospective homebuyers are uninformed of how much of a down payment they actually need. Of those surveyed, 39% believe they need to put at least 15% down, when many buyers actually qualify for a down payment of around 3%.

Many would-be buyers also perceive credit as a major barrier to homeownership, with 22% of survey respondents waiting to buy because of bad credit. Mortgage rates—now nearing 7%—are also a major barrier for many, but a lower credit score can save buyers as much as half a percent or more on that rate. For a $400,000 mortgage loan, a reduction of just half a percent can equate to a savings of $140 per month.

“Homeownership may not be the best choice for everyone at every point in their life, but for so many people to believe that owning a part of the American Dream is unattainable is sobering,” said NeighborWorks America President & CEO Marietta Rodriguez. “These results should energize everyone across the homeownership sector to see where they can make changes to give millions of people more hope.”