Owning a home has long been a major component of achieving the American Dream. Seventy-two percent of American consumers agree that now is a good time to buy a home (up from 68% last year), according to the second annual "How Americans View Homeownership" survey by Wells Fargo.
The survey, which included over 2,000 respondents, found the following in regards to Americans' views on homeownership:
- People who currently rent have a desire to buy homes, with only 1 in 10 saying they prefer renting versus owning.
- 17% of the general population is considering buying a home in the next two years. This response was from current owners and renters and included the option of buying their first home, purchasing a second home or moving to a different home.
- Respondents see the financial benefits of homeownership, with 43% saying owning a home is a good way to build equity or more assets.
What Homeownership Means to Consumers
The majority of survey respondents view homeownership as a dream come true or an accomplishment to be proud of. When asked how they would complete the sentence "To me, homeownership is...":
- 54% chose an "achievement to be proud of."
- 30% chose a "dream come true."
- A combined 65% said homeownership is a "dream come true" and/or "an accomplishment to be proud of."
Misconceptions of What It Takes to Buy a Home
Though 80 percent of respondents said they know and understand the financial process involved in purchasing a home, a large number of consumers have misconceived notions about down payment and credit score requirements, as well as loan options available to them.
- 67% of respondents believe that they "need to have a very good credit score to buy a home," with nearly half of those respondents believing a good credit score is over 780.
- 29% of respondents were unsure of the credit score needed to get a mortgage. For information about credit score requirements and mortgages, click here.
- 36% of respondents believe a 20% down payment is always required to buy a home. To find out what down payment you need for a mortgage, click here.
- 20% of respondents believe "parents or other relatives cannot give you money for a down payment". To find out more about gift funds and mortgages, click here.
- When asked to select the types of mortgages they'd heard of, almost all mortgage loan options were recognized by fewer respondents (ranging from 2% to 17% fewer). Here is a list of mortgage options.
Knowledge is a key factor when preparing to buy a home, and this survey shows that while many American's may have the desire to purchase, some are put off by misconceived notions about mortgage requirements.
If you are preparing or planning to purchase a home in the future, download our free Mortgage 101 Handbook for everything you need to know about the home buying and financing process.