The rub? More than half of Americans worry they can’t afford it
When it comes to worries, not being able to afford a home ranks in the top five of the American psyche.
This fear ranks up there with not being able to pay for health care, not being able to save enough money because you make too little and owe too much, and concerns about the nation’s heroin epidemic, according to a recent National Association of Realtors survey.
The one worry that fell below not being able to afford a home was the fear of being laid off, the poll of 1,500 adults revealed.
And yet most Americans agree, despite their concerns, that buying a home is one of the best ways to build financial security in the long run.
The concept of home ownership as a good investment lost its luster nearly a decade ago. But the pendulum has swung back with 84 percent of those surveyed saying they believe buying a home is a good financial decision — an enthusiasm that hasn’t been seen since 2007, the NAR reports.
Buying a home is typically the biggest purchase a person will ever make.
Despite the hefty price tag, people find plenty of reasons to sign a mortgage. They figure gaining equity in their own property beats paying rent to a landlord. Some are hoping to save and build net worth. Others are aiming to ease costs in retirement by paying off a home before getting there.
Not saving enough for retirement, by the way, is a bigger regret than taking on too much debt, as Debt.com reported.
“Despite the growing concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own,” says NAR President William E. Brown.
And more than half those surveyed said they were willing to suffer a bigger strain on their budget if they could own a home in a neighborhood with better schools and job opportunities. This was particularly true of people who were married, making more money, and already living in the suburbs.
About as many saw homeownership as positive for neighborhoods, making them more safe and stable for children and families.
Says Brown: “Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top reasons to own a home.”
Still, preparing for the future can put a strain on the present.
About four in 10 people said the lack of affordable housing was a “very big or fairly big problem.” Indeed, the online real estate database company Zillow reported recently that high demand for homes and a dearth of supply has driven median home values to more than $200,000 for the first time ever.
Those most likely to say their housing costs have created a financial pinch are those who make under $60,000 or who live in pricey markets in New York City and along the Pacific Coast, the survey said.
But sometimes the fears about the cost of home ownership are unfounded.
Forty percent of adults surveyed believed they needed to come up with at least a 15 percent down payment, when the actual median down payment is closer to 6 percent and has been for three years running. Even repeat homebuyers have typically needed only 14 percent up front.
Meanwhile, June saw month-ending mortgage rates at their lowest since October 2016, Zillow reported.
Just do your research first. Debt.com found that a “money-pit” can throw you into perilous debt as it did to the Notorious D.E.B.T. writer and her husband.
Article last modified on August 23, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Homeownership Considered Best Path To Longterm Savings - AMP.