Non-homeowners are plagued by a lack of credit, money and knowledge
First-time homebuyers have been absent from the current market ever since the housing downturn, choosing instead alternative housing solutions such as renting and living with parents or in-laws.
Even though there have been many reports claiming that first-time homebuyers are returning soon, no surge of homebuyers has flooded the market, and a new study by Bankrate has pinpointed three main reasons why:
- Twenty-nine percent of non-homeowner respondents stated they are not homeowners because they cannot afford a down payment
- Sixteen percent believe their credit is not good enough to qualify for a mortgage
- Finally, 35 percent of respondents said they simply do not want to own a home right now; that sentiment was especially prominent with Millennials (44 percent, compared to 28 to 30 percent for older age groups).
Hispanics were most likely to report that their credit was not good enough, which is inconsistent with other studies suggesting that four out of every 10 new households in the U.S. by 2020 will be headed by someone of Hispanic descent.
Lack of Information is a Problem
One of the key points in the survey is the high rate of non-homeowners who believe themselves unable to purchase a home. While that is mostly expected with the slowly recovering economy, what is unexpected is the amount of people who do not know about assistance services – a majority of respondents, when asked about how much they would put down on a home for a down payment, said they did not know.
That lack of knowledge about mortgages is not an isolated case. In a recent NeighborWorks survey, 40 percent of respondents had not received any information about down payment assistance programs, highlighting how few Americans really know how affordable the right mortgage can be.
So although economic problems persist for many Americans, a good, knowledgable agent can certainly help consumers better understand the real estate process.