We reported yesterday that homebuyers have a lot to learn before they can realize their aspirations of owning a home. The latest data from the quarterly Housing Opportunities and Market Experience survey by the National Association of Realtors (NAR) for the third quarter of 2016 gives more insight into the misconceptions about down payments. The two major conclusions drawn from this data are that many potential homebuyers are not aware of the various low down payment options for mortgages and that many are questioning whether they can afford a home.
During the second quarter of 2016, 80% of the homeowners who took part in the survey believed that buying a home was a good investment at the time. Three months later, 78% of homeowners agreed with this. Among renters, 62% said the second quarter was an opportune time to buy a home, while only 60% believe that is true now.
This slight decrease is attributed to the fact that home prices are increasing, with fewer houses listed on the market. While the low interest rates available over the summer helped to boost home sales, the fact that fewer and fewer homes are available is keeping sales low.
Others find that they do not know enough about their mortgage options. This is especially true when it comes to younger consumers. Many believe that they will need a down payment of at least 20% of the purchase price, while less than a fifth of those surveyed believe they will be able to buy with only 10% down. However, the average down payment today is generally about 5%.
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