The U.S. housing market might be experiencing its best year in a decade in 2017 but misconceptions about mortgage and the home buying process were holding back many potential home buyers according to a recent blog published by Freddie Mac.
According to the blog, that cited the fifth annual America at Home survey by NeighborWorks America, 74 percent adults and 84 percent of the millennials surveyed felt the homebuying process was complicated. The average millennial also thought the minimum down payment to buy a home was 21 percent and 70 percent adults felt they didn’t have enough money saved for a down payment.
The survey, based on responses from 1000 U.S. adults and 500 millennials (adults aged 18-34 years), also revealed how much the burden of student loan debt is delaying homeownership. It found that in 2017, 29 percent of adults knew someone who delayed the purchase of a home because of student loan debt. Among millennials, 38 percent knew someone who delayed buying a home because of student loan debt.
In addition, the survey found that relatively few consumers know where to find knowledgeable advice about how to qualify for a mortgage and buy a home with approximately 73 percent of all consumers and 62 percent of millennials saying they were not aware or were unsure about down payment assistance programs in their communities for middle-income homebuyers.
Urging home buyers to separate myth from fact, the Freddie Mac blog stated that the average down payment among first-time homebuyers in 2016 was 6 percent and 14 percent for repeat buyers, with programs like the Freddie Mac Home Possible Advantage mortgage providing down payment options that were as low as 3 percent.
“A great place to start is right where you live. Many state, county, and city governments provide financial assistance for people in their communities who are well qualified and ready for homeownership,” the blog noted.