Do You Know What it Takes?
Consumers across all ages, income brackets, and education levels lack awareness about low-down-payment options, according to the National Association of Realtors®’ latest Housing Opportunities and Market Experience (HOME) survey of more than 2,700 Americans.
Many are hesitant about buying a home right now, particularly young people, partially because they believe they must have a 20 percent down payment to purchase. However, the average median down payment for a first-time buyer has been 5 percent throughout the 35-year history of NAR’s Profile of Home Buyers and Sellers, the longest-running survey of national housing data.
Yet fewer than 20 percent of consumers in the HOME survey believed a down payment of 10 percent or less would be enough to purchase. Respondents ages 65 and older (43 percent) as well as those younger than 35 (37 percent) were the most likely to believe they need more than 20 percent for a down payment.
“It’s possible some of the hesitation about buying right now among young adults is from them not realizing there are financing options available that do not require a 20 percent down payment,” says NAR Chief Economist Lawrence Yun. Creditworthy prospective buyers should know that many lenders now offer safe, sustainable loans with as little as 3 percent down, and obtaining financing isn’t as difficult as it was in the immediate years after the downturn,” says NAR President Tom Salomone.
Source: Realtor® Magazine