More than 80 percent of Americans believe that purchasing a home is a good financial decision, according to the National Association of Realtors' 2015 National Housing Pulse Survey. Here are some of the highlights of the study, which show Americans' attitudes, perceptions and concerns of the U.S. housing market.
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Two-thirds of those surveyed perceive that housing prices are more expensive than they were a year ago.
The median existing home price in July 2015 was $234,000, according to the NAR. This is a 5.6% gain since July 2014. This past July marked the 41st consecutive month of year-over-year home price gains.
The amount of renters who are thinking about purchasing a home has increased since 2013, up from 36% to 39%.
As rental vacancy hit its lowest percentage in 30 years, economists have projected rent increases to get steeper in the future. From June 2014 to June 2015, rental prices climbed 3.5 percent, matching the biggest jump since 2008, according to the U.S. Department of Labor.
Today, median rent requires 30.1% of a renter's income, compared to 35% historically, while 15.3% of income is needed to purchase a median home today, compared to 22% historically.
The biggest perceived obstacle to homeownership remains unchanged from recent years, with 78% of those surveyed pointing to college debt and student loans as their main homeownership hurdle.
Roughly 40 million Americans owe more than $1.2 trillion in combined student debt, but while student debt does impact homeownership, it's not as much as you'd think, according to a Zillow study.
The study found that "as long as people complete at least a four-year degree, the effect of student debt on their chances of owning a home is negligible".
Seventy-one percent of current homeowners believe they could sell their house for what they paid for it, a substantial increase of 16 percentage points from 2013.
Increasing home values are contributing to increased equity for today's homeowners. According to data from Fannie Mae's National Housing Survey, only 37 percent of mortgaged homeowners believed that they had significant (20% or more) equity in their homes, but at least 69% of those homeowners are estimated to have at least 20% equity.
Homeowners who have a "negative perception gap" in their home equity also likely underestimate:
- Their ability to qualify for a new mortgage.
- How large of a down payment they could make with their home equity.
- Their opportunity and ability to sell their current home and upsize or downsize in a new home purchase.
Seventy-four percent of non-homeowners say that having enough money for a down payment and closing costs is at least a medium obstacle.
Contrary to common belief, a 20% down payment is no longer the status quo for home financing. According to a Wells Fargo survey, 36% of consumers still believe they need a 20% down payment for a home.
There are a variety of loan programs that allow eligible borrowers to put little to no money down on their home purchase. VA and USDA Rural Development loans provide 100 percent financing. Other low down payment programs include FHA, conventional, MyCommunityMortgage, and IHDA's FirstHomeIllinois.
Some of those loan programs even allow down payment funds to come from a family member or a grant from a state or local government down payment assistance program.