Homeownership might be the most important goal for millennials, according to a recent report by NerdWallet—however, there is some misunderstanding as to how difficult of an obstacle securing a down payment truly is.
NerdWallet commissioned an online survey of more than 2,000 U.S. adults conducted by Harris Poll to discover how Americans understand down payments, as well as the response to the idea that securing the down payment for a home is one of the biggest obstacles first-time homebuyers feel they need to overcome.
“The study shows that there’s a good deal of disagreement about how much you need to save for a down payment,” said mortgage expert, Tim Manni of NerdWallet. “Although that may be understandable, considering how many different loan options there are these days.”
The report noted that 44 percent of Americans believe you need a down payment of 20 percent or more to buy a home. While 44 percent of Americans who are not homeowners also responded that the lack of down payment savings is a “stumbling block.”
According to Manni, millennials have an accurate perspective on what amount is currently needed for a down payment—24 percent of millennials think you need to put just 6 percent to 10 percent down—a similar percentage is a way off, as 23 percent of millennials think you need to put more than 20 percent down.
“It’s hard to say whether this means millennials are savvy or confused about down payments, there is definitely some misinformation and confusion among millennials regarding how much money is actually required to purchase a home,” he said.
The poll also discovered that 48 percent of millennials responded that they plan to buy a home in the next five years. In addition, millennials are much more likely to do so than other generations as “33 percent of Gen-Xers and only 16 percent of baby boomers expressed the same intention.”
Read the full report by clicking here.