DES MOINES, Iowa – Sept. 15, 2014 – More than two-thirds of Americans (68 percent) feel that it’s a good time to buy a home – but many won’t try because they think tighter mortgage rules have made them ineligible for a loan.
After the recession ended, the U.S. tightened lending rules to keep a similar meltdown from happening again. But stories about tighter requirements have led some creditworthy buyers to think they cannot get a loan, according to the “How America Views Homeownership” survey by Ipsos Public Affairs for Wells Fargo & Company.
“Our survey found Americans still view homeownership as an achievement to be proud of,” says Franklin Codel, head of Wells Fargo Home Mortgage Production.
But “our survey also suggests we have an opportunity as lenders, nonprofit agencies and real estate agents to better inform Americans about credit ratings, mortgage costs and housing affordability,” he adds.
The “How America Views Homeownership” nationwide survey of 2,017 adults also revealed many Americans report that their financial houses are in order, which improves their ability to buy a home. For example:
- 82 percent of respondents said that they understand how to manage their personal finances; the same proportion, 82 percent, agreed that they generally do not spend beyond their means
- 63 percent of respondents have a “rainy day fund,” including more than half of the millennial respondents, ages 18-34
- 27 percent said that they tend to spend their money and not think twice about it
Home buying: What consumers know
- 74 percent of the survey respondents “know and understand” the financial process of buying a home, but other answers suggest they may not understand all their options.
- 30 percent believe only individuals with high incomes can obtain a mortgage.
- 64 percent believe they must have a “very good” credit score to buy a home.
- While 64 percent said that they’re knowledgeable about downpayments; nearly half (44 percent) think they need a 20 percent downpayment.
- When asked to list the biggest barriers to homeownership, a lack of downpayment funds ranked first, especially for respondents aged 18-34.
- Nearly half (44 percent) know nothing or very little about the closing costs required.
- About half feel they don’t have access to homes that fit their financial needs.
“It’s important for prospective homebuyers … to ask lenders and real estate agents questions about available options, such as downpayment assistance or FHA loan programs or VA loans for veterans,” says Codel. “Ninety-five percent of survey respondents said they want to own a home if they don’t already.”
© 2014 Florida Realtors®